Gibraltar: Financial Services

Lord Waddington: asked Her Majesty's Government:
	What are the implications for the economy of Gibraltar of any challenge to Gibraltar's position as an offshore financial centre.

Baroness Symons of Vernham Dean: My Lords, Her Majesty's Government fully support international financial initiatives that promote enhanced co-operation on taxation and regulatory issues, including through the IMF, the OECD harmful tax practices initiative and the EU tax package. We believe that Gibraltar's finance sector can continue to flourish within the framework of those initiatives and we are in consultation with the Government of Gibraltar on those issues. Gibraltar co-operates with the appropriate international bodies and was inspected earlier this year in accordance with the financial action task force criteria and the IMF.

Lord Waddington: My Lords, I thank the Minister for that full and helpful reply. Are the Government confident that Gibraltar's financial services industry, which was set up with the encouragement of the British Government, will not be undermined by any action of the European Commission? How are the Government going to persuade the Commission to spend less time looking at Gibraltar's taxation arrangements and more time protecting British citizens in Gibraltar from interference by Spain in their right of free movement?

Baroness Symons of Vernham Dean: My Lords, the Government are confident that Gibraltar's financial services industry will not be undermined. There are many initiatives in progress—non-tax initiatives as well as the taxation initiatives to which the noble Lord referred, which include the EU tax package and the directive on taxation of savings. We do not believe that either of those will harm Gibraltar. We believe that Gibraltar is in a position to comply. As the noble Lord knows, we have also been pursuing the other matters that he raised through the European Union. I hope that we shall continue to be able to make progress on those issues.

Lord Hardy of Wath: My Lords, will my noble friend comment on the anxiety in Gibraltar about Spain's attitude in regard to telephone communications?

Baroness Symons of Vernham Dean: My Lords, we are discussing that with the Spanish Government. We are concerned about the various telecommunications problems that Gibraltar is experiencing. The Commission is fully aware of our concerns. We have raised the issue with the Spanish Government at official and ministerial level. As my noble friend may know, Spain has agreed to increase the total number of telephone numbers available to Gibraltar from 30,000 to 100,000. We hope that that constructive first step will help to alleviate the immediate shortage.

Lord Howell of Guildford: My Lords, does the Minister agree that, with 20 per cent of Gibraltar's GDP now coming from financial services, there is the potential for a flourishing development of that business? If Gibraltar has greater self-determination in the future, it could become a very active and effective micro-state. Will she assure us that nothing is being raised in the current negotiations that could put obstacles in the way of that development? Does she also agree with the recommendation of the Foreign Affairs Select Committee in another place that if Spain does not normalise border relations as they should be normalised, the British Government should not hesitate to invoke Article 227 of the Treaty of Rome in dealing with the matter?

Baroness Symons of Vernham Dean: My Lords, the noble Lord is right. Gibraltar's financial sector accounts for 20 per cent of its GDP. That is a remarkable growth from virtually nothing 10 years or so ago. Over the years, successive British governments have welcomed and supported the development of the financial sector and we shall continue to do so. Part of the way in which we are able to support the financial sector is through good regulation to ensure its long-term future and to maintain its reputation, not only in Gibraltar, but in a number of our overseas territories. We have also regularly defended Gibraltar's interests in international bodies. For example, earlier this year we successfully defended Gibraltar's record on money laundering and last summer we refused to give in to unreasonable Spanish demands on the OECD initiative.
	The noble Lord also raised a point about the European Union. We are trying to resolve some of the difficulties in our discussions with Spain, but we have not ruled out turning to the European Union if necessary.

Lord Wallace of Saltaire: My Lords, I have previously noted that British dependencies account for a significant proportion of the world's offshore financial centres. While they serve useful functions, there are also a whole range of semi-legal and non-legal activities associated with all offshore financial centres. Do the Government have a clear strategy for the whole range of British dependencies that now operate as offshore financial centres, several of which have had substantial increases in their activities in recent years?

Baroness Symons of Vernham Dean: My Lords, I believe that Her Majesty's Government are addressing those issues. I did so when I was the Minister responsible for the overseas territories, my noble friend Lady Scotland did so when she took over that position and my noble friend Lady Amos does so. A wide range of issues is involved, including money laundering and terrorist financing. Gibraltar has been investigated but it has been decided that it should not be blacklisted or included among those countries that are subject to further queries in relation to such issues. Another issue includes tax initiatives, which was raised by the noble Lord, Lord Waddington. We are looking at OECD harmful tax practices and, again, we hope that Gibraltar will be in a position to comply with the OECD exercise. Other issues include the EU tax package. That range of issues applies to Gibraltar and the whole strategy must be applied to our overseas territories as a group.

Lord Barnett: My Lords, while no one would wish to damage an excellent financial services sector, can my noble friend assure us that action is being taken to deal with money laundering, including the laundering of terrorist money—assuming it can be found? In that context, there is also the question of tax evasion, which undoubtedly often takes place in some of those offshore centres.

Baroness Symons of Vernham Dean: My Lords, the EU directive on the taxation of savings is designed to deal with tax evasion. The United Kingdom wants that legislation to go ahead. It is important because it deals with the very issue of tax evasion. The whole purpose of the proposal—it is currently a draft proposal—is to create a level playing field, which we all need in this respect. We continue to press other countries, including, as I am sure my noble friend knows, the United States and Switzerland, to implement equivalent measures in those countries.

NHS: Decontamination Services

Baroness Knight of Collingtree: asked Her Majesty's Government:
	What action they propose to take with regard to the report on the inadequate sterilisation of surgical instruments made in the BBC XPanorama" programme of Sunday, 11th November.

Lord Hunt of Kings Heath: My Lords, over the past year, we have carried out a comprehensive survey of decontamination facilities and practices in the NHS. Those hospitals falling below the necessary standard were required to produce action plans. As a result, all NHS acute hospitals in England now have access to satisfactory decontamination services. The results of that work, and a comprehensive survey, are being published today.

Baroness Knight of Collingtree: My Lords, is it correct that the Government asked an expert in this field, Mr David Hurrell, to investigate the effectiveness of the methods used to sterilise hospital instruments in the NHS? If so, why was it that after Mr Hurrell produced his report and the Government had read it, he was given orders to keep it strictly confidential and to destroy all copies of it, as the XPanorama" programme disclosed? Is not the chairman of the panel investigating CJD quite right to say:
	XIt is astonishing to hold back such information from the public"?
	Finally, since Scotland has made similar information public, why cannot we have the same openness in England?

Lord Hunt of Kings Heath: My Lords, the snapshot survey to which the noble Baroness referred is being published alongside the full survey that the Government are publishing today. The snapshot survey was a small-scale survey that was based on a limited number of NHS trusts, and it informed the advice and guidance that was given to the NHS. It was followed by a full-scale survey and a requirement for action plans from those NHS trusts that were not producing adequate services. As a result, all acute trusts are providing satisfactory services in relation to decontamination. The snapshot survey has informed the whole process. It was undertaken during the past two years and it, too, is being published today.

Baroness Northover: My Lords, does the Minister remember that on 28th September 2001, the Government said in their Response to the Report of the BSE Inquiry:
	XExperience in dealing with public health concerns has demonstrated the value of an open and consultative approach to risk management"?
	Does he also remember that the Government said in that report:
	XOpenness was seen as essential to regaining public trust"?
	Does he feel that that squares with the suppression of David Hurrell's report from the public and from the CJD Incidents Panel? Should it have taken the tabling of this Question to produce that report?

Lord Hunt of Kings Heath: My Lords, the noble Baroness talks about suppression. I have already informed the House that the survey to which she referred has been published today, alongside a much fuller comprehensive survey. On the process, surely the process that we have followed is satisfactory. It involved an initial sample survey identifying problems and the giving of advice to the NHS. That was followed by a comprehensive survey and further advice. Actions plans were required and then action was taken. That process has ensured that the NHS has moved from a position in which a good many of its decontamination services were unsatisfactory to the current position, in which all such services are up to a satisfactory level.

Baroness Masham of Ilton: My Lords, bearing in mind the increase in hospital infections and their resistance to antibiotics, does the Minister agree that infection control, which includes sterilisation of instruments, has become much more important? Is it not important to push hospital trusts to come forward with reports, because some of them did not produce reports as they were told to do?

Lord Hunt of Kings Heath: Yes, my Lords. I pay tribute to the Select Committee of your Lordships' House, chaired by the noble Lord, Lord Soulsby, which has drawn to the attention of the Government and the NHS the problems of antibiotic use. Since its report was published, we have seen a reduction in the use of antibiotics. Your Lordships' Select Committee also reported on the issue of hospital-acquired infections, which is very much linked to that problem. As a result, we have introduced into the NHS a controls assurance scheme, which requires all NHS trusts to take a serious interest in hospital-acquired infection. Since 1st April 2001, all acute trusts have been required to participate in a new surveillance service and to provide data on MRSA. With robust, base-line data we can performance-manage the NHS to ensure that it improves the way in which it deals with hospital-acquired infection.

Lord Ashley of Stoke: My Lords, my noble friend has been very helpful to the House. However, can he clarify one point? Why was this material not published until today?

Lord Hunt of Kings Heath: My Lords, I have explained to the House—

Noble Lords: Oh!

Lord Hunt of Kings Heath: I believe that I have done so—certainly to my satisfaction. A couple of years ago an original piece of work was undertaken to indicate the type of issue and state of preparedness of the NHS in relation to decontamination standards. That work informed the issue of what guidance should be made available to the NHS, and was followed up by a comprehensive survey. The results of that survey are published today, alongside the snapshot survey. In addition, a huge amount of extra money has been spent by the NHS on improving decontamination services. As noble Lords will see if they read the comprehensive report published today, the result is that all acute trusts in England now have satisfactory decontamination standards.

Baroness Knight of Collingtree: My Lords, perhaps I may ask—

Noble Lords: Next Question.

Lord Williams of Mostyn: My Lords, we are now into the 16th minute and a Question about cats and dogs is to follow.

Dog and Cat Fur Trade

Baroness Gale: asked Her Majesty's Government:
	Whether they will follow the lead of the United States of America and introduce a ban on the import, export and trade in domestic dog and cat fur.

Baroness Symons of Vernham Dean: My Lords, the Government agree that the import, export and trade in domestic dog and cat fur is abhorrent. I can therefore tell the House that we are exploring what proportionate and enforceable steps we might take to ban any such imports. Over the coming months we shall work with the European Union to see whether there is a practical way forward on this issue. In the meantime, I shall be sending a letter to all MPs explaining what the Government propose to do about the matter.

Baroness Gale: My Lords, I thank my noble friend for that very positive reply. I am sure that all animal lovers in this country and those who care about animal welfare will be greatly heartened by her response. Is she aware that one reason that the United States introduced a ban was because fur traders in America were mislabelling the product in order to disguise its true origin and that, therefore, consumers were unaware of what they were purchasing? Is she further aware that a recent XNewsnight" undercover investigation showed that fur traders in this country were quite happy to do the same?

Baroness Symons of Vernham Dean: My Lords, I am aware of the United States ban on the import, production and use of cat and dog fur. I believe that it is clear that in the United States large quantities of cat and dog fur were mislabelled to mislead consumers. I remind my noble friend that legislation is already in place to stop consumers being misled about what they are buying. Under the Trade Descriptions Act 1968 it is a criminal offence to apply to goods by any means false or misleading statements. I am also aware of the XNewsnight" investigation which was undertaken a couple of years ago. We are carrying out further investigations into the current situation in this country and I hope to be able to report further.

Lord Marsh: My Lords, does the Minister agree that there is a very strong case for a major increase in such traffic, given the very beneficial effects that it would have on the preservation of wildlife and, in particular, small song birds?

Baroness Symons of Vernham Dean: My Lords, I hope that the noble Lord knows what he is letting himself in for in terms of the post bag that he will undoubtedly receive. I am kindly not naming the noble Lord in pointing out that in this country there is an enormous surge of public opinion about this trade. I believe that it is right to see what, if anything, can be done to meet the substantial public opinion that exists in relation to this matter.

Baroness Sharples: My Lords, will the noble Baroness say what labels are used to describe these furs?

Baroness Symons of Vernham Dean: My Lords, no fur in this country is labelled Xcat fur" or Xdog fur". Some fur is labelled simply as Xfur"; some as Xother fur"; and some as Xexotic fur". It is not illegal per se to import cat or dog fur and it is not illegal to label it simply as Xfur". However, it is illegal to misrepresent such fur as, for example, rabbit or wolf fur. When none of it is labelled Xcat" or Xdog" fur, it is very difficult for us to be precise even about how much is coming in to the country.

Baroness Strange: My Lords, does the Minister agree that, so far as we know, there is no Cruella De Vil in Britain, unless it is my noble friend Lord Marsh in heavy disguise?

Baroness Symons of Vernham Dean: My Lords, the noble Baroness, Lady Strange, is a bolder lady than I am in naming her noble friend. It is important for me to say that the British Fur Trade Association has assured us that it does not deal in cat and dog fur. However, of course, some fur traders outside that organisation may be undermining the stand that the British Fur Trade Association has taken.

European Arrest Warrant

Lord Lamont of Lerwick: asked Her Majesty's Government:
	What decisions have been taken concerning the European arrest warrant and what further consultations will take place.

Lord Rooker: My Lords, the Justice and Home Affairs Council in Brussels on 6th December did not reach political agreement on the framework decision on the European arrest warrant. It will be considered again by the heads of state at the meeting of the European Council at Laeken at the end of this week.

Lord Lamont of Lerwick: My Lords, I thank the Minister for that reply. Is he aware that some of us were astonished to read the Home Secretary's protestations of outrage to his Greek opposite number, Mr George Papandreou, about the continued detention of 12 British plane spotters? Will the Minister confirm his written reply that those 12 people, if accused of espionage by the Greeks, would have been extraditable to Greece without substantive court proceedings? If the Home Secretary is serious in the expressions that he has made about the suffering of these people in a Greek prison, is this really the time to continue to back a proposal that would allow people to be extradited without the elementary requirement of justice—the presentation of prima facie evidence against them in a court?

Lord Rooker: My Lords, the European arrest warrant system will work only after charges are laid. People cannot be extradited for the pursuit of inquiries. Therefore, it is not as though one is jumping the gun. Some 32 serious offences are now on the list, including trafficking in human beings, arson, rape and a whole host of other crimes. If charges are made against people in relation to those offences, then the extradition process will follow. But it should not necessarily follow that the process will be dragged out over years and years.

Lord Strabolgi: My Lords, is my noble friend aware that one of the people arrested is the wife of one of the plane spotters, who said that she is not in the least interested in plane spotting and went along only to keep her husband company?

Lord Rooker: My Lords, noble Lords are asking me to comment on a case on which the judges have delayed until tomorrow their final decision. I have nothing to say about the case of the plane spotters in Greece. That would be inappropriate, even though I might want to make a few choice remarks about the tourist industry between our two countries.

Lord Pearson of Rannoch: My Lords, given that, like all dictatorial regimes, the European Union is legislating in secret on this matter, are the Government aware of a leak by the Greek Justice Minister published in a Greek Sunday newspaper known as XFree Press" to the effect that the warrant, even in its present form, would allow British subjects to be extradited from this country for a crime which carries a prison sentence of one to three years in the issuing country, even if that is not a crime in this country? In those circumstances, can the Government give the House an undertaking that they will respect their promise to Parliament and will not agree this measure in Laeken or anywhere else until the scrutiny reserve has been lifted by your Lordships' Select Committee?

Lord Rooker: My Lords, it is right that scrutiny must be carried out. I understand that tomorrow the Minister concerned, Bob Ainsworth, will appear before your Lordships' scrutiny committee as he did before the Commons yesterday. Let us not assume, as some noble Lords do, aided and abetted by XThe Forgers' Gazette"—the media in this country—that this issue is current legislation; it is not. It will be subject to primary legislation in an extradition Bill. That will not be rushed through or done behind closed doors. It will be done on the Floor of this House and in the other place.

Lord Wallace of Saltaire: My Lords, does the Minister accept that those of us who recognise that serious crime in this country is often aided by the ability to escape to other EU countries and fight extradition for prolonged periods nevertheless have some questions about the European arrest warrant in terms of dual criminality? We should very much like the British Government to be tougher on that issue than they appear to have been so far.

Lord Rooker: My Lords, the issue of dual criminality is sensitive as regards matters which are not crimes in this country but are crimes elsewhere. Different countries have different processes. Some areas of dual criminality have not been finalised. I refer, for example, to the issues of euthanasia and abortion. I know nothing about the legislative process in other countries, but both those issues are free vote issues in this Parliament. While all laws are equal, issues passed on free votes must carry a greater force. No decisions have been taken. But all these matters will be debated in terms of the law of this country in primary legislation in a Bill to be brought before Parliament relating to extradition in the early part of next year.

Lord Howell of Guildford: My Lords, it sounds as though the extradition Bill will be a large new Bill. When it comes before this House and the other place, will we in practice have any opportunity to alter it or will it all have been sewn up in prerogative treaty form so that there is not much room for amendment? For instance, will we be able to amend the crimes listed for this process? Will there be any freedom at all or is this just a rubber stamp on a matter which will be agreed in the Council of Ministers and which we shall have little opportunity to alter?

Lord Rooker: My Lords, I freely admit that there will be an international treaty obligation. The list of crimes referred to currently stands at 32. That has changed in the past few days. I do not know whether that will be the final list, nor how big the extradition Bill will be. However, no one can claim that it will come as a surprise. It will be the result of a consultation document published this year. There has been a review of extradition law over a period of time following recent high profile cases. It is no surprise that there will be an extradition Bill. However, it is a fact that, as regards the European arrest warrant, an extradition Bill is a better vehicle for legislating for it. I do not know how flexible the legislation will be. However, the primary legislation will be debated and, I presume, amended at each stage of the process in both Houses before a final Act of Parliament is passed.

Lord Stoddart of Swindon: My Lords, I do not know whether my noble friend the Minister has cleared up the matter. If an agreement is reached at Laeken and the matter is brought before Parliament for primary legislation, will it be possible for that agreement, whether or not it is a treaty, to be altered by Parliament—by the House of Commons or the House of Lords or by both acting together? That is what we want to know. If such primary legislation goes through the House of Commons on a guillotine Motion, so leaving little time for individual clauses to be debated, will this House be able to debate it properly and not be insulted when it makes reasonable amendments to what might not be a satisfactory Bill?

Lord Rooker: My Lords, in answer to the second part of my noble friend's question, I do not know in which House the Bill will be first introduced. Therefore, I shall not speculate about how each House will deal with the matter. As regards the first part of his question, I cannot add to what I have said. I do not know what will be the nature of the Bill. Work is being conducted at present. An agreement on the European arrest warrant has not yet been reached at a political level in Europe. Until it is, we are speculating in hypothetical circumstances.

Lord Goodhart: My Lords, would the Minister be prepared to consider supporting the Eurobail system, which would enable people charged in one country of the Union to be released on bail to return to their home countries pending the hearing of a case? Would not that have enabled the plane spotters in Greece to be released on bail pending a decision taken by the Greek courts on whether they were to be proceeded against?

Lord Rooker: My Lords, it might have done. However, if charges are to be made by another country with which we have an extradition treaty, there is a due process. The idea of the European arrest warrant is to speed up the process so that we do not have months and years of delay during which time alleged criminals seek to avoid justice. There is nothing new intrinsically. Extradition laws are old, almost 19th century legislation. We are trying to modernise them so that people cannot play off one country against another depending on where the crimes are committed.

Business

Lord Carter: My Lords, at a convenient moment after 3.30 p.m., my noble and learned friend Lord Falconer of Thoroton will, with the leave of the House, repeat a Statement being made in another place on the local government White Paper.

Anti-terrorism, Crime and Security Bill

Read a third time.
	Clause 26 [Certification: review]:

Lord Goodhart: moved Amendment No. 1:
	Page 14, line 24, after Xthat" insert Xat the time of the review"

Lord Goodhart: My Lords, in moving Amendment No. 1, I shall speak also to Amendments Nos. 2 and 3. These amendments are based on the 5th report of the Joint Committee on Human Rights, which was published last week. Clause 25(2)(a) of the Bill provides that on appeal, SIAC must cancel a certificate issued by the Home Secretary under Clause 21 if it considers that there are no reasonable grounds for believing that the appellant's presence in the UK is a threat to national security or there is no reason to suspect that he is a terrorist. Under Clause 25(2)(b) SIAC must also cancel the certificate if it considers for some other reason that it should not have been issued. For example, that could be relied on in a case where there has been a procedural irregularity in the issuing of the certificate.
	I turn to Clause 26, which deals with SIAC's powers on review, as opposed to an appeal. On review, SIAC can cancel a certificate only if there are no reasonable grounds for the belief that the appellant's presence in the UK is a threat to national security or that there is no reason to suspect that he is a terrorist.
	SIAC has no power to cancel a certificate for any other reason.
	Clause 26 raises two problems that were considered by the Joint Committee on Human Rights. First, it is not clear that SIAC can cancel a certificate if the Home Secretary had a reasonable belief or suspicion at the time he issued the certificate but subsequently new information shows that that belief was mistaken. That difficulty is covered by Amendment No. 1. It makes clear that the reasonableness of the belief or suspicion must be based on facts as known at the time of the review and not simply on the information available at the time of the certificate.
	Secondly, SIAC cannot, on a review as opposed to an appeal, cancel the certificate on the basis of a procedural irregularity, which means that the certificate was not validly issued, even though it would have been cancelled if the proceedings had been by way of appeal rather than review. There seems to be no logical reason for distinguishing between the powers of SIAC on an appeal under Clause 25 and on a review under Clause 26. The Joint Committee on Human Rights rightly considered that the powers on review should be brought into line with those on appeal.
	Amendment No. 3 covers a different point. It was raised by the Joint Committee on Clause 27(9). At present it states:
	XCancellation by the commission of a certificate issued under section 21 shall not prevent the Secretary of State from issuing another certificate, whether on the grounds of a change of circumstance or otherwise".
	On the face of it, that gives the Home Secretary power to issue a new certificate if, for example, he disagrees with the conclusion of SIAC that the detainee was not a threat to national security. He could grant a new certificate and start all over again, perhaps with a new SIAC panel. On that issue the Joint Committee stated:
	XThis could result in cases being batted backwards and forwards indefinitely between the Secretary of State and the Commission, and would not offer adequate protection for detainees against arbitrary interference with their right to liberty under Article 5 of the ECHR".
	Some time ago the Home Secretary said that he was willing to look again at the wording of Clause 27(9). However, the Government have not come up with any new wording.
	I go back to the report on the issue. It states:
	XWe believe that it should be possible to amend clause 27(9) in a way that will reflect the Government's intentions, which seem to now to have been spelt out sufficiently clearly to enable a satisfactory amendment to be drafted. The Secretary of State could be enabled to issue a new certificate if, and only if, (a) there is fresh evidence, (b) the original certificate was quashed on technical grounds rather than because there were insufficient grounds for making it, or (c) there has been a material change of circumstances justifying the making of a new certificate. We still consider that the sub-clause as currently drafted does not provide adequate safeguards against arbitrary detention".
	Amendment No. 3 achieves the objectives pointed out by the Joint Committee. New paragraph (a) allows a new certificate to be issued where SIAC cancelled the original certificate on technical grounds but does not allow a new certificate to be issued where SIAC disagreed with the Home Secretary's conclusion that reasonable grounds for the relevant belief or suspicion existed. New paragraph (b) covers the case of new evidence or some other change of circumstances.
	We want to hear what the Government have to say on these issues. These are obviously issues which would have been better brought up at an earlier stage in the passage of the Bill through the House. However, owing to the extremely tight schedule that has been imposed on your Lordships' House, that has not been possible. I hope that, even at this late stage, the Government will be prepared to accept these uncontroversial amendments. If they need drafting improvements those can be provided in the other place. I beg to move.

Lord Lester of Herne Hill: My Lords, I am sure that the Joint Committee, of which I am a member, will be grateful to my noble friend Lord Goodhart for drafting the amendments in accordance with the recommendations of its report. My noble friend has put the matter so clearly that I wish to add only a couple of additional points.
	First, given that this is a derogation from the fundamental right to liberty and that the European convention requires the Government to demonstrate that the derogation is strictly necessary to meet the exigencies of the situation, the Joint Committee in both its reports attached particular importance to there being adequate safeguards against abuse of these wide powers. One of the ways in which it sought to do that is by narrowing the otherwise broad words in the way that these three amendments seek to do.
	At the back of the Second Report of the Joint Committee on Human Rights there is the evidence given by the Home Secretary, David Blunkett. If Members of the House are interested and look at col. 5, question 34 onwards, that is where the matter of Clause 27(9) is dealt with. Vera Baird, a Labour MP, who is a member of the committee, asked the Home Secretary questions about the vagueness and unsatisfactory nature of Clause 27(9). The Home Secretary said:
	XI am, unusually for me, pausing because the intention is that there would have to have been a change in circumstances or material evidence that has not previously been available, in circumstances where I would take the case back to SIAC having failed".
	He went on to state:
	XWe did consider the question of whether a certificate could be issued by any Home Secretary in circumstances where it was necessary to override such a judgement. I adduced that that would be a breach of human rights and would not be an acceptable process, nor did I think that it would accord with the terms of the derogation which were envisaged by those who drafted the Convention".
	Then he said:
	XSo I am prepared to look at the term 'otherwise'".
	Mr Harry Carter, the assistant legal adviser at the Home Office, asked whether he could assist the committee. The Home Secretary invited him to do so. The legal adviser said:
	XOne of the reasons for the words 'or otherwise' is to deal with the case where SIAC cancels a certificate on appeal, but the Secretary of State appeals that cancellation in a court of law and wins that appeal in a court of appeal. In that type of case he might wish to issue a fresh certificate".
	Then the Home Secretary said:
	XWe need to make sure that we make that absolutely clear then, because we are otherwise asking for the appeal to go back to SIAC".
	Vera Baird then said:
	XThank you very much",
	and went on to another matter.
	We took that to be very encouraging. It shows, in the words that the noble Lord, Lord Rooker, has used several times, that this is a listening government; that they are open-minded; and that, on the crucial question of safeguards against abuse, they are willing to write them into the Bill. Therefore, we very much hope that that can now be done, even at this late stage, in order to produce a wide consensus and make it less likely that lawyers will successfully challenge the compatibility of the measure as applied before British courts or before the European Court of Human Rights.

The Lord Bishop of Portsmouth: My Lords, I am grateful to the noble Lord, Lord Goodhart, for moving the amendment. It is very much in sympathy with some of the themes of the critique made of the Bill; namely, the function and workings of SIAC. The amendment will give SIAC more teeth and—if I may add to the imagery—not tie its hands behind its back too much.

Lord Rooker: My Lords, I should say at the outset, because we have a small group of amendments to deal with on Third Reading, that we have continued—right up until I came to the Chamber—to consider the issues raised in the House and by the Select Committee. While we do not necessarily agree with all the points made or all the amendments, that does not mean that we have not given them serious consideration.
	This group of amendments relates to the operation of SIAC and the issuing of certificates. We agree with the intention behind Amendment No. 1, tabled by the noble Lords, Lord McNally and Lord Goodhart, but I hope that I can persuade your Lordships that it is unnecessary because the Bill already delivers the outcome that they seek.
	The Special Immigration Appeals Commission is not exactly a high-profile body in the country at large, but we have given it a good airing. It has not just turned up. It is not created by the Bill. It was legislated for in 1997 by both Houses—by and large without dissent, as far as I am aware. So it is not a court invented for the purpose of the Bill; it is already in operation—although I accept that so far it has dealt with only three cases. It is indeed special and was set up to deal with a highly limited number of cases.
	SIAC will be able—indeed, it is required—to take account of information post-dating the Secretary of State's decision at the review stage as well as at the appeal stage. That requirement stems from the wording in Clauses 25(2)(a) and 26(5)(a) respectively. Those provisions are identically worded and state that a certificate is to be cancelled if SIAC considers that there are no reasonable grounds for Xa" suspicion or belief. So on review, as well as at the appeal, SIAC will need to come to its own view as to whether there are reasonable grounds for Xa" suspicion or belief, and in doing so it will have regard to relevant information that has come to light since the original decision—including, where applicable, since the appeal or previous review.
	I appreciate that the Joint Committee on Human Rights in its discussion at paragraphs 12 to 16 of its second report, issued a few days ago, may have come to a somewhat different reading of what the wording in the review provision means. But we are clear that the current wording does require SIAC to take account of all relevant information up to the time that it hears the review, and that it is compliant with Article 5(4) of the European Convention on Human Rights.
	Amendment No. 2 would provide for the review procedure an additional ground on which SIAC could cancel a certificate. That would bring the wording more closely into line with that in Clause 25 relating to the appeal, although they would not be made identical. There is a reason why the two clauses differ. The provision in Clause 25(2)(b) of the Bill—namely that SIAC
	Xconsiders that for some other reason the certificate should not have been issued"—
	is there specifically to enable SIAC to cancel a certificate where there has been some form of procedural irregularity. That issue will not arise at the review stage as, if there had been any irregularity in making the Section 21 certificate, the matter would already have been considered by SIAC at the appeal stage.

Lord Goodhart: My Lords, I am grateful to the Minister for giving way. Is it not a distinct possibility that, in some cases, there could be a review when there has been no previous appeal?

Lord Rooker: My Lords, I hope that I shall be able to address that point. If I may, I shall continue but shall certainly return to that point.
	There would be no scope for procedural irregularity in the making of a certificate to arise between the appeal and a review, or between one review and the next. We accept that SIAC would be able to cancel a certificate on review under the amendment only where
	Xthe certificate could not properly have been issued immediately before the review if it had not previously been issued".
	But that seems to envisage a situation in which a review follows immediately upon the issuing of a certificate. There is no realistic prospect of such a situation arising because, following the making of a certificate, the first avenue of redress for the person concerned is an appeal, not a review. On appeal, procedural irregularities can be addressed. The right to an immediate appeal against a certificate applies as much to a second certificate issued in respect of the same individual as it does to a certificate issued for the first time to an individual.
	I should also add that we believe that there is more than adequate opportunity for a person to make an appeal to SIAC, especially following the amendment that we made on Report enabling SIAC to hear out-of-time appeals in appropriate cases. We do not therefore think that an equivalent of Clause 25(2)(b) needs to be provided in Clause 26(5).
	I now turn to Amendment No. 3, which returns us to an issue that we have previously debated: the circumstances under which it is open to the Secretary of State to issue a certificate under Clause 21 after SIAC has cancelled a previous certificate. The amendment identifies three exhaustive cases under which it would be open to the Secretary of State to re-make a certificate—provided, of course, that the other requirements have been met. They correspond to the cases identified by the Joint Committee on Human Rights. They also correspond to the list of potential circumstances that the Government mentioned in debate at an earlier stage of the Bill, although we also mentioned a fourth circumstance—namely, where a decision by SIAC to cancel a certificate had been overturned.
	As I said in Committee, we fully understand your Lordships' wish to ensure that the Bill does not give the Secretary of State arbitrary power to reissue a Clause 21 certificate in defiance of a decision by SIAC to cancel the first certificate. We have continued to give thought as to whether an alternative formulation can be found to that currently in Clause 27(9), but, to be honest, we remain of the view that the current wording is the best.
	We accept that the list provided in the amendment, possibly with the addition of the fourth circumstance to which I just referred of an overturned certificate, captures all the circumstances that we—and, I suspect your Lordships, otherwise there would have been more items in the list—can currently think of where it might be justifiable for a new certificate to be made. But there is always a risk in creating an exhaustive list that something that none of us have thought of will be overlooked, and we do not want to take that risk in this area.
	Another approach, which was referred to in Committee or on Report, would be to delete Clause 27(9) and argue that the Secretary of State would be able to issue a fresh certificate in appropriate cases. But that carries risks, the greatest of which is that if the Bill is silent on the matter, the consequences would be uncertain. We therefore prefer to include the provision in the Bill.
	We confirm, as we did in Committee, that the intention is that the Secretary of State will issue a fresh certificate only where that is justified. SIAC would take a dim view of any Secretary of State who seemed to be ignoring its decisions, and would, I am sure, cancel any inappropriately made future certificate in short order. It would clearly be in possession of all the facts and the reasons why the second certificate had been issued, and those reasons would have to be good.
	Furthermore, it might well be a breach of Article 5(4)—and perhaps also of Articles 6 and 13—of the European Convention on Human Rights for the Secretary of State to take such a course without justification. So it would not just be SIAC that would take a robustly dim view of a Secretary of State acting irresponsibly and arbitrarily; it would be open to challenge by authorities outside SIAC under those articles of the ECHR, with which we of course want to comply. For those reasons I ask the noble Lord to withdraw his amendment, but I shall of course be happy to answer—or to try to answer—the question that follows.

Lord Lester of Herne Hill: My Lords, realising the procedural position that we are now in, I shall be brief in my question, but it is important to get the matter clear. The words Xor otherwise" are completely unfettered. That is the problem. As I understand it, the Minister said that although they are unfettered, they may well have to be read down—given some limited effect—in order to comply with the relevant provisions of the European Convention on Human Rights. But then he said that that may happen outside SIAC.
	In order to be absolutely clear, will the Minister confirm that I am right in thinking that SIAC, as the Attorney-General has accepted, will be bound by the Human Rights Act to apply the European Convention on Human Rights; that SIAC will have all the powers of judicial review that a judicial review court will have; and that SIAC will therefore be able to ensure that the words Xor otherwise" are not used to authorise arbitrary detention? The Minister understands that I am putting the question because it ties in with the exclusion of judicial review.

Lord Rooker: My Lords, exactly, and I believe that the noble Lord has got it right. As I suspect that I have caused apoplexy in the Box to my left, I must add that the words Xoutside SIAC" do not appear anywhere in my notes. The fact is that we want to be compliant with the European Convention on Human Rights. We have derogated from Article 5, using the procedures set out.
	The noble Lord is right in saying that the words Xor otherwise" stand in the Bill but they are fettered in the way he has described. First, SIAC would take a dim view of a Secretary of State who without good reason simply issued another certificate after the first had been cancelled. Secondly, the Secretary of State in doing that, or in contemplating doing that, would be under legal advice from the Law Officers and others who would be involved in such cases, pointing out the high risk of possible breaches of Articles 5, 6 and 13 of the European Convention on Human Rights. That does indeed fetter the Secretary of State and, although it is not another limb as regards the words Xor otherwise", the fact that those words appear in the background means that the words are fettered in the way the noble Lord described.

Lord Lester of Herne Hill: My Lords, the only matter which is still unclear to me is that there is a derogation from Article 5. Therefore, I do not understand how SIAC or any other court will be able to read it in the context of Article 5. I do not expect the Minister to have an answer to that, but I should be grateful if he could have one at some stage.

Lord Rooker: My Lords, I do not have an answer to that question off the top of my head. However, I shall get one— I shall indeed get one—but I do not know whether it will be during today's proceedings. If so, I can interject and give the noble Lord the answer.
	The derogation is from Article 5.1, not Article 5.4, so it is not a complete derogation from Article 5. I am pleased that I have had the opportunity to put that on the record because a derogation from the European Convention on Human Rights is extremely narrow and targeted. We did not want to take that action but it was the only course open to us. We are happy to be Xfettered" by the rest of the European Convention.

Lord Campbell of Alloway: My Lords, I am grateful to the Minister for giving way. He got it absolutely right when he said that these matters will be considered outside SIAC. I believe that he was right because the noble and learned Lord, Lord Donaldson, said that SIAC did not have the full powers of judicial review and that there was a residual jurisdiction.
	I intervene only because when the noble Lord, Lord Rooker, said what he said I was taken straight back to what the noble and learned Lord, Lord Donaldson, said. I think that the noble Lord has got it right.

Lord Rooker: My Lords, yes, I am extremely fettered myself in responding to that comment. Some noble Lords will understand but will not necessarily sympathise with me. However, I believe that the noble Lord, Lord Campbell of Alloway, is right in what he says about the noble and learned Lord, Lord Donaldson.

Lord Goodhart: My Lords, I thank the Minister for his answers to Amendment No. 1, which is satisfactory. It is clear and on the record that the Bill is intended to give SIAC power to look at the facts as they exist at the time of the appeal or review and not simply as they existed when the certificate was granted.
	We are less satisfied with the answers to Amendments Nos. 2 and 3. Amendment No. 2 does not deal with what I believed may be a problem. It is that some detainees may not appeal, so the first time SIAC will come across a case will be at its first review at the end of the initial six months. Even if at that stage SIAC identifies a procedural irregularity, which would have meant that the certificate ought not to have been issued, it will be unable to deal with it.
	As regards Amendment No. 3, it seems to me that we have not entirely met the problems raised by the Joint Committee on Clause 27(9). That shows one of the problems of dealing with the Bill too rapidly. Had we been given more time, it would more than likely have been possible to agree a satisfactory form of wording. As it was, it was not possible.
	We do not intend to press the amendments further and I beg leave to withdraw Amendment No. 1.

Amendment, by leave, withdrawn.
	[Amendment No. 2 not moved.]
	Clause 27 [Appeal and review: supplementary]:
	[Amendment No. 3 not moved.]
	Clause 33 [Certificate that Convention does not apply]:

Lord Dholakia: moved Amendment No. 4:
	Page 18, line 4, leave out Xissues" and insert Xhas issued both a certificate under section 21 in respect of the appellant and"

Lord Dholakia: My Lords, Amendment No. 4 is grouped with Amendment No. 5 and it deals with Clauses 33 and 34, which were Clauses 34 and 35 at the Report stage.
	The aim of our amendment is to restrict the number appearing before SIAC. In reality, no one other than those against whom a certificate has been issued—and I suspect that the number will be low—will fall into the category. To an extent, our amendment will restrict the free-standing nature of the clauses. That is precisely what the Minister tried to do and failed at the Report stage.
	Our main concern is two-fold. First, genuine asylum seekers may be victimised as a result of public prejudice and unduly restrictive legislative or administrative measures; and, secondly, the carefully built refugee protection standard may be eroded. Current anxieties about international terrorism risk fuelling a growing trend towards the criminalisation of asylum seekers and refugees. Asylum seekers increasingly have a difficult time in a number of states, either accessing procedure or overcoming presumptions about the validity of their claims, which stems from their ethnicity or mode of arrival. The fact that asylum seekers have arrived illegally does not vitiate the basis of their claim. The fact that certain ethnic or religious backgrounds may be shared by those who have committed grave crimes does not mean that they themselves are also to be excluded.
	We saw the evidence of that during the time of the Gulf crisis when a substantial number of people were locked up either because they were Iraqi or because they came from the Arab states. The culmination of that was that at the end of the process all of them were found to have no claim against them and were granted asylum in this country.
	At the Report stage, the noble Lord, Lord Rooker, spoke at length in order to assure us about the difficulties of unifying Clauses 34 and 35, now Clauses 33 and 34. He has obviously failed, but I suspect that our amendments give him a leeway in which he can address the matters in a proper manner. I do not want to rehearse the arguments which we put forward at the Report stage last Thursday, but perhaps I may take up some of the comments the Minister then made and offer our observations now on what he said then.
	The noble Lord, Lord Rooker, suggested (col. 1042) that the thrust of most of the speeches against Clauses 34 and 35 was that Articles 1(F) and 33.2 of the refugee convention should not exist. That is not the case. We want to reaffirm our commitment to the current convention regime where exclusionary factors are considered currently with inclusionary factors. Does the noble Lord, Lord Rooker, mean to suggest that the intention of the legislation is to give effect to Articles 1(F) and 33.2? Those articles already have effect in UK law and therefore there is no need for additional legislation to give effect to Articles 1(F) and 33.2.
	It is in any event unrealistic to suggest that inclusionary and exclusionary aspects can be neatly separated in all cases. The noble Lord stated (col. 1043) that we should not just take an ill-considered decision on exclusion without hearing the person's case and that nothing in the clause is intended to produce such an approach. Does the noble Lord, Lord Rooker, mean that the inclusionary aspect will be considered if that is deemed necessary in order to assess the exclusionary aspect of the claim? How might that be judged? Can the Government give an assurance that all the relevant factors will be assessed? How will that be possible if the full asylum hearing is denied?
	It is worth noting that the exclusion of a full examination of the asylum aspects of a claim in the first instance could generate further bureaucracy and costs in cases where the Secretary of State later revokes a Clause 34 certificate or where the issue of the certificate is quashed by SIAC under the terms of Clause 33(5). In such a case the applicant would have to go back to the beginning in order to have the inclusionary aspect of the claim examined once more. Considerations of time and expense are always persuasive when establishing practical guidelines.
	Moreover, it is possible that in certain cases the Secretary of State will be legally obliged to rule on a refugee claim irrespective of the applicability of the exclusion clause. That possibility would arise in the context of spousal and dependent refugee claims.
	My noble friend Lord Avebury has pointed out that it is not stated on the face of the Bill that factors leading to a proper consideration of an individual's case would be fully considered before a certificate is issued under the terms of Clauses 34 and 35. My noble friend went on to say that the Secretary of State should be required to consider proportionality in each case, to which the noble Lord, Lord Rooker, responded by saying:
	XI take it as axiomatic that those considerations will be in the mind of the Home Secretary before he issues a certificate".—[Official Report, 6/12/01; col. 1044.]
	Can the Government confirm that the proportionality test, as codified in the terms of the refugee convention, will remain intact under the new legislation?
	Clauses 33 and 34 concern certification by the Secretary of State for the purposes of expulsion, whereas Clause 21 concerns certification for the purposes of detention. Do the Government agree that, under the terms of Clause 21, there are no equal provisions for removing the asylum seeker's right to have his or her full asylum claim examined? Indeed, we have been given to understand that, under Clause 21, the suspected terrorist will remain entitled to have the inclusionary elements of his or her claim assessed at the same time as the exclusionary elements are addressed. Does the noble Lord acknowledge the absurdity of creating a higher standard for cases to be brought before SIAC, which merely concern issues of national security, than more serious cases of suspected terrorism under Clause 21? I beg to move.

Lord Hylton: My Lords, I rise to support these two amendments. It would be desirable to ensure that the number of cases going before SIAC should be kept to an absolutely irreducible minimum. I say that because those hearings are closed. The public is not admitted and no media are present. The whole procedure is opaque and held in secret.
	Perhaps I may add that, in my view, it is extremely desirable that hearings concerning the vast majority of normal asylum claim cases should be conducted in full under the most open procedures. The amendments would provide a means to ensure that that would take place.

The Lord Bishop of Portsmouth: My Lords, I know that repetition is not a virtue, in particular at Third Reading, but like the noble Lord, Lord Dholakia, I am disappointed that, since this matter was debated on Report we have not made the progress towards a possible amalgamation of these clauses that some had hoped to achieve. Frankly, I would prefer it if the two clauses were not included in the Bill, for the reasons given in the debate held last Thursday night. I hope that the amendments will be given active consideration, even at this late stage. I think it is extremely important to achieve progress in this area.

Lord Campbell of Alloway: My Lords, I rise briefly to support the amendments. In my personal opinion, they are amendments of substance. They are important and essential. I hope that the Minister will take them at more than their face value. The amendments form a part of the machinery of this statutory form of justice.

Lord Avebury: My Lords, I do not wish to add much to the comments I made in the debate on Report. However, in light of the fact that tomorrow we are to hold a debate on Zimbabwe, perhaps noble Lords would like to consider during the course of those proceedings the treatment of Zimbabwean asylum seekers in the United Kingdom. Most asylum seekers are fast-tracked through Oakington. They tend to finish up in prison or being held in a detention centre. Finally, they are sent back to a country where the rule of law does not prevail.
	Under the terms of the Bill as it stands, the Secretary of State would have the power to issue a certificate stating that a person who came here from Zimbabwe, having been convicted of an ordinary criminal offence in the courts of that country, would not be eligible for substantive consideration of his application for asylum. However, we know that the courts in Zimbabwe have been suborned and fatally undermined by President Mugabe. We have seen the recent report produced by representatives of the International Bar Association as a result of their visit to Zimbabwe last March. We have also seen the report of the Commonwealth mission on the failure of President Mugabe to observe the terms of the Abuja accords.
	The situation in the country is very well known; namely, that it is not possible to trust the convictions of a Zimbabwean court of law. Preferential prosecution of members of the opposition is widespread and members of the MDC are constantly under threat of being arrested, thrown into prison and sometimes suffer torture before being brought before the courts of law.
	Under the terms of Clause 34, an individual who came to this country from Zimbabwe to claim asylum could become the subject of a certificate issued by the Secretary of State. My noble friend has already pointed out that other instances were drawn to the attention of the noble Lord, Lord Rooker, at the previous stage. The Minister responded by commenting that the Secretary of State would bear those matters Xin mind" when considering whether to issue a certificate. But it does not say that on the face of the Bill. There is no form of words to make it plain that the Secretary of State would consider the proportionality of signing a certificate against all the surrounding circumstances pertaining in a country such as Zimbabwe.
	I think that the Minister should seek to reassure the House by adding to what he said during the previous debate. He should promise that, when the Secretary of State issues a certificate, he will make clear what factors he took into consideration and how he sought to strike a balance between the fact that an individual might have been technically ineligible under the terms of Article 1(F) and the considerations that I have already mentioned regarding the application of the rule of law in the country concerned. If a certificate was accompanied by such a statement it would be, in effect, equivalent to a substantive determination of the individual's asylum application. In this way the Minister would be able to reassure the supporters of the amendment that the power will not be misused.

Lord Thomas of Gresford: My Lords, it is important to try to grasp what Clauses 33 and 34 seek to achieve. We are considering here the circumstances where a refugee, or an alleged refugee, has applied for asylum and has failed in the first instance to establish the main ground; namely, that he has a well-founded fear of being persecuted for reasons of race, religion, nationality and so forth. The individual then lodges an appeal to the Special Immigration Appeals Commission. At that stage, the Secretary of State would intervene and slap on to that individual a certificate, which will have the following effect.
	The commission, which would normally balance the arguments as regards whether there is a well-founded fear of persecution, would then turn away from the issue raised in the appeal itself to consider whether the Secretary of State was right intervene by issuing the certificate on the appellant. If, having examined the statements and certificate, the commission agrees with the former, the appeal is dismissed without the commission ever considering the gravity of the events or fear—by virtue of which Article 1A would or might apply to the person or the threat by reason of which Clause 33(1) might apply. The Secretary of State's intervention completely distorts the appeal process.
	That apart, under Clauses 33 and 34 the asylum seeker does not have to be a suspected terrorist. Clause 33 does not make clear what it is that the commission considers when deciding on the statements and the certificate. The clause does not state, for example, that SIAC will take evidence on either side—only that it will consider the statements. Presumably the commission is entitled to or must take into account evidence on either side but only in relation to the statements in the certificate—not to the applicant's well-founded fear of persecution.
	That seems to be an extraordinary interference in the provisions regarding a commission which we have been told will in effect exercise the jurisdiction of the High Court by way of judicial review. The commission will not be reviewing the decision against which the appeal is brought. It will be sidetracked into reviewing something quite different.
	Article 32(2) of the 1951 United Nations convention states that the expulsion by a contracting state of a refugee,
	Xshall only be in pursuance of a decision reached in accordance with due process of law. Except where compelling reasons of national security otherwise require, the refugee shall be allowed to submit evidence to clear himself, and to appeal to and be represented for the purpose before competent authority or a person or persons specially designated by the competent authority".
	Presumably the Government are trying to take account of
	Xexcept where compelling reasons of national security otherwise require".
	That brings us within the scope of the anti-terrorism provisions for suspected international terrorists. Amendments Nos. 4 and 5 seek to ensure that the curious intervention by the Secretary of State in the normal appeal process will only be in circumstances where he is in a position to issue a certificate under Clause 21, believing that the asylum seeker is a suspected international terrorist. We take the view that it would be wrong to apply Clauses 33 and 34 to every asylum seeker, whether or not he is a suspected international terrorist.
	If this is truly an anti-terrorism Bill, we invite the Government to reconsider whether it is necessary to include provisions that apply to all asylum seekers or whether intervention by the Secretary of State shall take place only where he is also of the view that the person is a risk to national security and suspects that the person is a terrorist.
	If those small amendments were made, that would greatly alter the scope of Clauses 33 and 34 and maintain our world standing as the foremost country for the protection of people who seek relief from persecution. In that spirit, I urge the Minister to think again.

Lord Rooker: My Lords, I am grateful to noble Lords who tabled the amendments as they provide the opportunity to revisit the issue in the latter stages of the Bill. The substance of Amendment No. 5 in particular was debated on Report.
	As to Amendment No. 4, the provisions in Clauses 33 and 34 are separate from those in Clauses 21 to 32 and do not cover exactly the same set of people. Nor are they intended to do so. A person may be identified as a suspected international terrorist as someone whom the Secretary of State considers is excluded from the protection of the 1951 convention and whose removal would be conducive to the public good.
	For such a suspected terrorist, there is no legal or practical barrier to his removal. A certificate under Clause 21 would be inappropriate and would not be required because the person would not be detained. However, we would want Clause 33 to apply to such a person because its purpose is to make more upfront use of the 1951 convention exclusion. Clause 33 is already narrowly focused and further narrowing, as Amendment No. 4 proposes, would not be appropriate.
	Clause 21 exists because we envisage that we will want to prosecute alleged international terrorists first, before removing them from the country. If we cannot do that, we shall want to detain them. There may be people whom we want to prosecute but cannot—but we shall still want to remove them. If they can be removed, we would not want to detain them—so a certificate would not arise. On the other hand, if Clause 33 says that the convention does not apply, it is necessary to have that extra power.

Lord Avebury: My Lords, almost every asylum seeker who fails in his claim is detained prior to removal.

Lord Rooker: My Lords, persons may be removed from their homes and detained for a few hours. At some holding centres, we cannot detain people for more than six hours anyway. We must either let them return home or keep them overnight at a detention centre. Detention may take the form of transport from the person's home to the airport. The noble Lord is correct to that extent but not in general. Not everyone necessarily passes through Immigration Service detention centres. I do not know the numbers off the top of my head.

Lord Avebury: My Lords, the Government's whole argument for the expansion of the present detention centres by 1,900 places is that we need them to speed up the process of the removal of people who are not entitled to be here. The supposition is, therefore, that these people do spend time in detention centres prior to their departure from this country.

Lord Rooker: My Lords, that is what I am saying, but I could not agree with the noble Lord's first question without extra advice. It is true that people are detained, but not necessarily in a detention centre. Incidentally, detention centres have been renamed Xremoval centres", and even I have to get used to that. That is the purpose of the centres; they are for removal.
	But not everyone passes through these centres. There are areas other than detention centres—for example, some of the reporting centres—where we can detain people for up to six hours prior to removal. People who will not leave voluntarily are necessarily detained. In some ways, the process of removal could be described as a detention because people are escorted.
	A very small number of people—I cannot offer the House a view as to how many—will be covered by a Clause 21 certificate and a very small number will be covered by Clause 33. They could be the same people, but not necessarily. I hope that that is an answer—it may not be satisfactory—as to why we need the power in Clause 33. It would not apply necessarily to everyone who had a certificate under Clause 21 issued against them.
	I shall come to the points raised by the noble Lord, Lord Dholakia, in a moment. Amendment No. 5—with which, I should say to the right reverend Prelate, many of us have sympathy—seeks to provide that the construction provision in Clause 34 should apply only in cases where a certificate has been issued under Clause 21. For the reasons I have given already, I do not believe that there should be a linkage back to Clause 21.
	However, I agree that there is a question as to whether Clauses 33 and 34, as they are now numbered, should be linked together. As the noble Lord, Lord Dholakia, said at Report stage, originally, in an earlier draft, they were one clause. They have been separated for clarity. I have taken this matter away, thought about it and discussed it with my ministerial colleagues and advisers. I have some sympathy with the view that the clauses should be linked because the Bill is concerned with a specific set of people and, in some ways, should not read across to the generality of the public. We have thought about the issue carefully and we have concluded that we will be better off leaving the Bill as it stands.
	The Government believe that, as a matter of law, there is no inherent balancing test within Articles 1(F) and 33(2) of the refugee convention. If Clause 34 was to be linked to Clause 33, that might incorrectly suggest that we took the view that the legal construction of Articles 1(F) and 33(2) was different in cases not covered by the Bill to which those exclusion clauses would apply.
	Based on the evidence and the discussions we have had, we believe that there is a fine legal balance—which has been put to Ministers—and that we could have problems in some cases by linking the two clauses. I freely admit to noble Lords that we have changed our mind every few hours since we debated the clause on Report, but that has been the nature of our considerations.
	There are two further points I should like to cover before I answer specific questions. First, we have been reviewing our policy on the exclusion clauses in the refugee convention in relation to cases not covered by the Bill. We shall make our views known in the new year. I am not able to share any parts of the review at the moment.
	Secondly, Clause 33 is confined to a small group of individuals. The procedural approach set out in the Bill for certain Article 1(F) and Article 33(2) cases will not always be applied to cases which fall outside Clause 33. That approach is confined to cases where not only do the exclusion clauses apply but where the removal would be conducive to the public good.
	As to the point made by the noble Lord, Lord Dholakia, I wish to put on record that there is nothing in the Bill to state that a person who enters the UK illegally would be automatically excluded from protection under the refugee convention; nor would a person from a particular ethnic background be automatically excluded. Everything relevant to whether a person is excludable under the convention would be assessed. However, this does not mean that all matters relevant to whether a person has a well-founded fear of persecution would be considered, but only those matters which had a bearing on the exclusion clause.
	That brings me to the issue of proportionality. Clause 34 provides that Articles 1(F) and 33(2) will not have a proportionality test in the sense that the degree of mistreatment a person might face if returned would not be taken into account when considering whether the exclusion clause applies. But, in considering whether an exclusion clause applies, the Secretary of State would take account of all factors relevant to whether the exclusion clause should apply. For example, he would consider whether allegations that a person had committed a crime abroad were true—as in the Zimbabwean example given by the noble Lord, Lord Avebury—or whether the alleged crime had a strong political motive. The Secretary of State would not return someone who had been excluded from the refugee convention if to do so would breach the European Convention on Human Rights.
	I know that there is a division between the two opposition parties on this issue. It is quite clear that the Liberal Democrats are with the Government and that the Conservative Party would like us to pull out of Article 3 and return people. We are not prepared to countenance returning anyone in breach of Article 3 of the European Convention on Human Rights. I want to make that absolutely clear. We have said it before and it does not need any qualification.
	As to the issue raised by the noble Lord, Lord Goodhart—which I hope to answer if I have not done so already—if an appellant raises human rights issues as part of an appeal, SIAC would go on to hear those issues after it had upheld the Secretary of State's certificate. The noble Lord is correct to say that SIAC could hear both sides of the case as to whether a certificate should have been issued. I hope that that is a positive answer to the noble Lord's question.
	As regards Article 32 of the refugee convention, we do not consider that Clauses 33 and 34 of the Bill are contrary to the safeguards provided in that article. This is a matter that we shall come back to when the review I have referred to is produced in the new year. I suspect that the matter will figure very much in our debates on the Bill referred to during Questions today.
	I should tell noble Lords and the right reverend Prelate that, along with my ministerial colleague, I met today with a representative of the United Nations refugee body, but I was not able to go into great discussions about this issue. Indeed, I was not able to give the conclusions of our considerations because they are on-going following the brief meeting I had this morning.
	We are very conscious of the United Kingdom's position internationally. We are carrying out practices and upholding the convention for those who have a well-founded belief of persecution in the way that we have done—and been proud to do—over the past five decades. We are not seeking to cause ourselves any problems internationally in the way that the Bill is drafted. I agree with the arguments that if the two issues were linked it would make matters clearer, but that would present us with the fine balance of legal arguments to which I have referred. This has caused us to structure the Bill in this way.

Lord Thomas of Gresford: My Lords, I am grateful to the noble Lord for giving way. I hope he will forgive me, but I am a little confused by his response. Let us take an ordinary asylum case. Let us suppose that a person makes an application for asylum and, without the issue of any certificate by the Secretary of State, the initial adjudicator turns him down because the other side have succeeded in establishing under 1(F) that there are serious reasons for considering that the applicant has committed a serious non-political crime outside the country of refuge.
	Let us suppose that under Clause 33(2) the Government establish that there are reasonable grounds for regarding the person as a danger to the security of the country. That is just an ordinary case. Does that mean that the initial adjudicator, as a result of the drafting of Clause 34, is not entitled to take into account the degree of persecution that individual might suffer were he to be returned to a particular country? Are all those aspects excluded simply because grounds in Article 1(F) and 33(2) are urged at first instance or does it mean that the appeal from that initial decision must ignore the degree of persecution which the individual is likely to suffer?
	As it appears in the Bill, it seems to me that whenever the Government put forward Article 1(F) or 33(2) in answer to a claim for asylum, that immediately precludes the applicant from relying on his basic right of establishing that he has a well-founded fear of being persecuted for reasons of race, religion, nationality and so on. Is that really what the Government intend?

Lord Rooker: My Lords, as regards the first part of the noble Lord's question when he spoke about an ordinary asylum case, those that are before the Special Immigration Appeals Commission cannot in any way be considered as ordinary asylum cases. At present there are 1,200 applications a week. That has been the rate in a constant flow for a couple of years. There are approximately 60,000 applications a year. Of that number only a few in single figures will be subject to SIAC or this Bill. We are talking about a handful of people and we have never spoken of any larger number. So to try to translate these issues to an ordinary asylum case does not carry across. That may be an unsatisfactory answer from a non-lawyer, but it is satisfactory for a person such as myself as a former constituency Member in the other place for asylum seekers and now the Minister dealing with the case work as well.
	But the ordinary asylum case bears no relation whatever to the people who are subject to parts of this Bill, particularly as regards the issue of certificates under Clause 21 of the Act or anyone who comes near SIAC. That commission was set up four years ago and in that time there have been three cases. We have been dealing with 60,000 cases a year for the past four years, which represents 250,000 cases. To try to translate those figures to this Bill does not work. There is no comparison whatsoever.

Lord Avebury: My Lords, the noble Lord said that Clause 34 applies only to appeals before SIAC. That is not what it says.

Lord Rooker: My Lords, I am not saying that at all. Clause 34 does not say that. In Clause 33 the certificate of the convention does not apply. Subsection (1) states:
	XThis section applies to an asylum appeal before the Special Immigration Appeals Commission".
	Clause 34 is not linked in that way for the reasons I have explained.

Lord Dholakia: My Lords, I am grateful to the Minister for the explanation that he has offered and to all noble Lords in all parts of the House who have contributed to this debate. It is rather unsatisfactory that the review of the convention's exclusion clauses will be published in the new year when in reality some of the implications should have been known at this stage, particularly in how they apply to Article 1(F) and 33(2). That would have been most helpful.
	I do not know whether the Minister had completed his contribution, but I am grateful that his views are now on record. Therefore, I shall not seek the opinion of the House. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Local Government White Paper

Lord Falconer of Thoroton: My Lords, with permission, I shall repeat a Statement made in another place by my right honourable friend the Secretary of State for Transport, Local Government and the Regions. The Statement is as follows:
	XWith permission, Mr Speaker, I should like to make a Statement about the local government White Paper, which we are publishing today. This White Paper sets out a new vision for local government at the beginning of the 21st century. It seeks to establish a partnership between central and local government, reflecting the critical importance of local authorities both as a tier of democratic government and with the responsibility to deliver high quality public services to local people.
	XDemocratically elected councils should be part of the fabric of our communities. The services they provide have a vital part to play in sustaining and enhancing the social and economic prospects and environmental quality of our towns, cities and countryside.
	XThey can have a profound effect on the opportunities and quality of life of the people who live and work there: educating children, providing care for the vulnerable, making places safer and cleaner to live in, and providing reliable local transport.
	XPeople therefore expect a great deal from their council; and those expectations are rising. To meet them, councils have constantly to seek new and more effective ways to deliver customer-focused services and lead their communities. The proposals in this White Paper will provide a framework in which all can do so, through the application of the Government's four principles of public services reform. These are: establishing a national framework for the delivery of high quality services and effective community leadership—for example, people everywhere want high quality education for their children; within this framework, freeing up local councils to meet their communities' particular needs—these will be different in a London borough from a shire district; making sure that councillors and council staff have the skills and money to do their jobs well, and providing more choice for people in the services they want to use.
	XI want to tackle the trend towards excessive central prescription and interference, which dominated central/local relations in the 1980s and 1990s. We are reversing that approach. The White Paper marks a pronounced step away from centralisation.
	XIt is about increased freedoms, better incentives, and a significant reduction in the number of controls, consent requirements, plans and over-elaborate guidance which have been all too characteristic of the top-down approach to local government. It is truly about local government. It is a significant shift away from local administration, based on a belief that we do not need to control everything, and a recognition that local authorities are often in the best position to respond to local needs and aspirations.
	XI hope that this will encourage local political and civic leadership. Today's reports into this summer's disturbances in Oldham, Burnley and Bradford show how important it is to have a leadership with a democratic mandate, who are prepared to take the often sensitive, always difficult, decisions necessary to ensure social cohesion. So this White Paper has at its heart community leadership and the democratic renewal of local government.
	XFor all councils we want to reduce the bureaucratic burden and give them the freedom to innovate and focus on driving up standards. We therefore intend to cut the number of plans and strategies that councils are required to produce, to scale back the number of area-based initiatives and give greater scope to rationalise partnerships.
	XWe shall remove many of the present requirements to obtain government consent before acting. Over 50 will be abolished with another 30 under review. We shall also provide councils with wider powers to provide services to others.
	XWith these new freedoms come responsibilities. For the first time we will produce a clear performance profile for each council. The Audit Commission will compile a scorecard and will identify each council as either high performing, striving, coasting or poor performing. It is our intention that further freedoms over and above those for all councils will be applied to high performing authorities.
	XWe will also intervene decisively where councils are failing their local people. Where councils are not collecting their council tax or providing high quality services, for example, this will not be acceptable, and we will take action.
	XThe Government agree with the Local Government Association that there should be joint ownership of the service priorities for local government. It is therefore our intention that—through negotiation and dialogue—we will agree a single list of priorities for local government.
	XThe White Paper also sets out our specific proposals for the reform of our local government finance system. Last week, I announced that next year will be the final year in which grant to local authorities would be based on the present standard spending assessment formula.
	XWe will be bringing forward our detailed proposals for a new system of grant distribution next year. But I can inform the House that I have decided to abolish the standard spending assessment mechanism and replace it with a system which is easier to understand, better reflects the real cost of services and the needs of a local area.
	XWe also intend to give local authorities greater flexibility to undertake capital investment. We shall scrap the system of credit approvals and, instead, authorities will be free to borrow for capital investment without consent provided they can afford to service the debt. So where a council sees the need, for example, for a new library or leisure centre, it will no longer need our permission to raise the necessary funds, provided it acts prudently.
	XAs a consequence of this approach, we shall abolish the receipts taken into account mechanism—which has acted as a disincentive for local authorities to dispose of surplus assets. I know that there has been concern about the growth of ring-fenced funding and the way in which this limits local discretion. We will therefore restrict ring-fenced funding to areas which are genuine high priorities for the Government and where we cannot achieve our policy objectives by specifying outcome targets.
	XThe setting of council tax itself is very much a local decision. But we also recognise that the risk of high council tax increases falls on local taxpayers. We have already ended pre-announced universal capping. Our long-term goal is to dispense with the reserve capping powers altogether. But we intend to proceed cautiously.
	XWe do feel that we should take the first step towards the ending of capping—and so I can announce that the power to cap will not be used in respect of high-performing authorities. A large number of authorities and honourable Members have raised with me the difficulties being created by the council tax benefit subsidy limitation scheme. The principles underlying the scheme are sensible. However, in practice its application has proved to be very complex. Some have proposed that we should simplify the scheme or find other ways of reducing its impact. Having considered all of the options, I have decided to abolish the scheme altogether.
	XThese proposals form part of the Government's agenda for modernisation and reform. For many, they will be challenging. They are meant to be. We proposed these changes not for their own sake, but because local people will benefit—benefit from the requirement that all services should be delivered to an acceptable standard; benefit from the fact that the changes we all really want to see—better schools and social care, improved local environments, better transport and other vital local services—will get the priority they deserve; and benefit from effective community leadership by councils in touch with local people and working to meet their aspirations.
	XThese proposals will put the 'local' back into local government—allowing local councillors to really make a difference for their communities. This is vital if we are to re-engage people, and as a result see an increase in turnout at local elections.
	XThis White Paper outlines a new and lasting basis for effective local government. I want to see central and local government working together in a constructive partnership to deliver the high-quality public services that local people have the right to expect. In a practical way, this White Paper shows how we can do so. I commend this White Paper to the House".
	My Lords, that concludes the Statement.

Baroness Hanham: My Lords, I thank the Minister for repeating the Statement. I must make my usual declaration that I am a member of a local authority in London.
	I am slightly breathless from having tried to deal with the Statement in a remarkably short time. I have drawn a number of conclusions. Local Government will be delighted that there is to be yet another new vision for it! It may not have quite the profound feeling of relief that the Government believe it should have.
	It is impossible to respond in detail to the content of the White Paper. However, one of the things that affects local government most is the system by which it receives its pay and rations from the Government. We have heard a great deal over the past few years about the importance of reforming local government finance. The expectation today will have been for more than merely a statement that the standard spending assessment system is to be abolished. That will be welcomed. But when will new proposals be produced that give an indication of the new mechanisms and formulas that will be used?
	Every system disadvantages someone. The present one has been manipulated each year to take from one part of the country and give to another. Local authorities need stability of finance. I hope that this is what they will get for the start of 2003. I also hope that we shall have an opportunity to discuss in this House the methods that will be adopted by the Government for the future of local government finance. The White Paper contains brave words regarding the freeing up of local authorities, but they will only be as free as the money they have available to spend.
	I have little doubt that the ability to undertake capital investment will be welcomed. It is long overdue. Councils which can demonstrate that they can afford to pay the debt charges and can manage the major capital schemes that might be involved should be able to do so. That is a welcome step.
	All councils will rejoice at the abandonment of the council tax benefit subsidy limitation. I recommend that any noble Lords who want a little amusement should turn to what is euphemistically described as the Xsimplified" explanation of council tax benefit subsidy limitation which appears in the White Paper. However hard anyone tries, it is almost impossible to rationalise, justify or explain what the council tax benefit subsidy limitation ever was, or ever shall be, and what was its benefit. The explanation is so abstruse that it is no wonder that no one has every readily understood it.
	The Government have indicated that they believe that councils—that is, some well-behaved councils—should have more control over their own finances. I have no doubt that that will be welcomed, so long as there really is true freedom.
	Since 1997, ring-fencing of grant to specific requirements has risen from 5 per cent to 15 per cent of the total grant. We discussed the matter briefly in relation to the previous White Paper on local government finance. Perhaps the Minister would be kind enough to explain how that ring-fencing will change—now that the Government have admitted that it brings with it an over-heavy-handed approach—a council's ability to deliver services to its own priorities.
	The Statement places great emphasis on the fact that the White Paper envisages better incentives and a significant reduction in the number of controls exerted on local government. It will be interesting to see how or whether this works out. For example, councils are being banded into Xhigh-performing", Xstriving", Xcoasting" and Xpoor-performing" on the basis of a Xbalanced scorecard" to be compiled by the Audit Commission. I must say that the designations are enchanting. Can the Minister give any further facts about what this will involve? Will it include results from Xbest value" and Audit Commission inspections, and indeed from Oftel and the other inspectorates? Or will it be based on financial prudence and financial outcomes? In other words, what will influence the bandings? And what is the implication for council management?
	The Statement indicated that capping will be abolished for high-performing councils. I assume that that means Xhigh-performing" according to the banding. But that will probably lead to the majority of councils being potentially subject to capping.
	It is clear from what little of the White Paper I have been able to absorb in the extremely brief time available that the good management of councils remains a totem of the Government. Rightly, they are concerned about democratic legitimacy, but will the Minister say where he believes that will end? We have elected mayors, although there are not many so far and they do not seem to be wildly popular. There is a suggestion in the White Paper that if councils perform poorly, pressure will be exerted by the Government to have those led into an elected mayor/council manager system. That does not seem to me to resemble local democracy. What is the future for local government if central government are to have an influence on that? What about the problems arising from the new current structure of councillors who have little to do and a somewhat inadequate role as scrutineers of policy? What are the expectations arising from the further reforms predicated in the forthcoming White Paper on regional government?
	I am sure that there will be much in this White Paper with which we shall be able to agree, but the history of central government's control of local government does not lead one to have any confidence that the brave words about encouraging local democracy will, in truth, have much meaning. Every year the Government has promised more autonomy for local councils, but in fact they have centralised and reduced local discretion. It will take a significant change of attitude, which I hope is in this paper, for that to come about.
	There are also indications in the paper that the expectation is that it will encourage greater interest in local councils on the part of the local electorate. We shall see. It is fair to say that none of the other initiatives has had much success in that direction. It is also true to say that the electorate will not be interested until they truly believe that they can affect what happens. If this White Paper and the proposals in it lead to greater autonomy and to a greater interest on the part of the local electorate in what happens in their local area, they will have served a good cause.
	Finally, there must remain grave concerns about the promises to give more powers to local councils when it is intended to strip counties of their planning powers and to replace many councils with a new tier of regional local government. There are brave words in the Statement about reducing bureaucracy and freeing local government to innovate and giving more powers to provide services to others. I hope that that will happen in practice, but there will also need to be a great deal more discussion before action is taken on many aspects of the White Paper so that we can see that its proposals are truly reflective of the Government's stated determination to let local government do its own thing.

Baroness Hamwee: My Lords, I, too, thank the Minister for repeating the Statement. I declare an interest as a member of the London Assembly which I believe will be affected by many of the proposed changes. We are told that the White Paper sets out a new vision for local government. That term is in danger of being rather overworked. We have had much reform since 1997 and I think that we are entitled to ask whether this is a new, new vision or the old new vision recycled.
	We have had reform in structure, as the noble Baroness has mentioned. Many of us—certainly my noble friends and I—would like to see greater reforms than we have seen so far in the area of powers. The Government have not been prepared to let local government exercise a power of general competence and functions are largely set by central government.
	The Paper makes much reference to services and uses the term Xcustomer". However, we have to remember that local government is about far more than delivering services, although I readily admit that services are an important part of its work. I welcome the reference to the community leadership role. I hope that there is much reference to that in the White Paper which, like the noble Baroness, I have not had time to read in the short time available. That is not a complaint as I understand how that situation arose.
	We are told that the proposals in the White Paper sit with the Government's principles of public services reform. Certainly, the delivery of public services requires the ability and the local intelligence of local authorities. This is a government Statement, not just a Statement from the Minister's own department. I note that earlier this month the Secretary of State for Education and Skills mentioned putting even more pressure on local authorities to delegate more money to schools, apparently promoting her tight control of local education authorities. I am not sure how those two matters sit together. The Government apparently also want to provide more choice for people. That concept would stand a five hour debate in itself and therefore I shall not try to analyse it now.
	A reduction in the bureaucratic burden would, of course, be welcome, as would freedom to innovate and to focus on driving up standards. We must accept—it is important to make the point in the context of the bureaucratic (if I may say so) reforms which support the measure—that the freedom to innovate must include the freedom to get things wrong. If local authorities are not allowed occasionally to make mistakes, they do not genuinely have the freedom that the Government say that they will give them.
	The Statement refers to removing requirements to obtain government consent before acting in 50 cases, with another 30 under review. Can the Minister tell the House after the review how many circumstances will require central government consent before action can be taken? The Statement also refers to wider powers to provide services to others. That is welcome. Can the Minister confirm that that will include the power to charge for those services? Can he confirm that local government will be—I am afraid I shall use a term that I rather deplore—on a level playing field with the private sector?
	We are told that the Audit Commission is to compile a scorecard and that the Government will produce a clear performance profile for each council. In a Statement which refers to removing top-down control, I find that a slightly odd notion. What is the difference between a set of scorecards and a league table? We are only a short way into a relatively new regime, that of best value. I believe that local authorities should have the opportunity to get that right working with central government. At present the matter is very centralised. I do not believe that we even know yet when local authorities will be allowed to set their own performance indicators. Perhaps the Minister can comment on that today. Certainly, one hears all around that the only growth in local government is in the form filling required for inspections related to the best value regime. The notion of best value parishes in the White Paper is, frankly, mindboggling.
	The noble Baroness referred to the categories of local councils. There was a clear reaction around the House when the Minister set out the terms. I look forward to describing Xstriving" and Xcoasting" local councils on the doorstep.
	As regards intervention where councils are failing, the Statement says that central government will take action. I believe that we are shortly to have annual elections. Is that not the real test? Do not elections constitute the real action here? The Statement quite rightly started with a reference to democracy and that needs to be borne in mind throughout.
	Clearly the alterations to the financial arrangements will require a good deal of consideration. The replacement of the standard spending assessment with a much easier system is a Holy Grail which I sincerely hope the Government can find.
	We welcome the greater flexibility for capital investment. The Minister says that that is provided that the council can afford to service the debt and acts prudently. Who will judge whether the local council can service the debt and is acting prudently? Also, as a result of these proposals, will councils now be able to spend the receipts from council house sales?
	We welcome the restriction of ring-fencing—I should prefer to see something closer to abolition—although we are entitled to treat it with a little scepticism given last week's government settlement which, as the noble Baroness, Lady Hanham, said, increased ring-fencing by 15 per cent.
	The White Paper says that the setting of council tax is a local decision. Indeed it is, but it is based on, among other things, awareness of the gearing effect. Local authorities will not be totally autonomous until they are financially autonomous. When we come to the actual legislation, I am sure that we shall spend a great deal of time on that.
	I note that the benefits that the Government want to see include matters such as better personal care and better transport. But we have to acknowledge that demographic change and the increased need for social care are outside our control, and that better transport can be achieved only to a limited extent in a regime where, for instance, buses are deregulated.
	From these Benches we prefer to see a regime which praises rather than blames. If the new proposals go in that direction in practice, they will be welcomed. The Deputy Prime Minister, in his foreword to the 1998 White Paper, talked about the Xspecial status" of councils. They do have a special status and we should all recognise that; in other words, each authority should have freedom—and not just when the Government judge that they should have it. If local government is entitled to freedom, why is it required to earn it? Should it not have it by right?

Lord Falconer of Thoroton: My Lords, I congratulate both noble Baronesses, Lady Hanham and Lady Hamwee, on the competent and clear way in which they dealt with the Statement. I shall go through the points they raised.
	The noble Baroness, Lady Hanham, said that pay and rations were important. She asked when announcements would be made about the financial regime. My right honourable friend in another place said that we aim to share our thoughts on the new formula in the new year. The new formula will come into effect for next year's settlement; that is, the settlement for the years 2003 and 2004.
	The noble Baroness welcomed the capital investment freedom and the abolition of council tax benefit subsidy limitation. She drew attention, quite rightly, to the fact that even trying to explain it proves to be difficult. The noble Baroness welcomed also the greater freedoms and asked for an explanation of what the effect will be in relation to ring-fencing. Perhaps I may deal with that briefly. We shall be looking closely at all ring-fenced grants to ensure that they are restricted to those cases which are genuine priorities for us and where we cannot achieve our policy goal by specifying output or outcome targets. We are committed to restricting ring-fenced funding to those cases.
	The noble Baroness asked why we should end capping only for high performers. Local taxpayers bear the risk of ending capping so we are moving cautiously towards that goal. Protecting those who use and pay for local services has always been a central plank of this reform agenda. Reserve capping powers may also be needed to provide safeguards at times of revaluation. That is why we are restricting it to high performers.
	As the noble Baroness, Lady Hamwee, said, the description of categories of council produced some reaction in the House. The description seeks to convey the qualities of councils. As the reaction indicated, the words did convey an element of what their performance would be like. The Audit Commission will do the assessments, as has already been said. Its assessment methodology will draw on the widest possible range of local authority performance information from existing audit inspection-based outcomes and performance-indicated data, including user satisfaction. It will reflect performance at both individual service level and corporate level and take into account current performance and proven capacity to improve.
	Given the depth and breadth of information which has been brought together for the first time, no significant area of a council's performance will be overlooked. Moreover, high performing councils will have to be high performers in priority services and must not perform poorly in any service. The methodology will be developed and piloted by the Audit Commission in consultation with local government and other relevant parts of the public sector to ensure both its reliability and robustness.
	The noble Baroness asked where it will end. That is another way of asking what will happen to poor performers. Where a council is failing with little or no prospect of improvement, we will apply early intervention measures. The measures used will depend on the specific circumstance of the authority and the nature of the failure. They could include transferring functions to other providers and giving stronger councils or other public bodies a role in running failing councils.
	All councils will be expected to address the extent to which greater diversity of service provision will improve performance. As the noble Baroness, Lady Hanham, pointed out, stimulating greater interest in local government among local electorates is one of the aims in that regard. We seek to achieve that by ensuring that service delivery improves and that the role of local authorities as community leaders becomes established. It is those two aspects which will contribute to a greater interest being taken by the electorate in who their local authority representatives are. That is something to which we all aspire.
	The first question the noble Baroness, Lady Hamwee, asked was whether this was a Xnew" new vision or an Xold" new vision. I am sure we all see local authorities performing a role as community leaders. That is something to which we all aspire. That is our vision for local authorities and I am sure that the noble Baroness, Lady Hamwee, aspires to that as well.
	The noble Baroness said that this new regime must be about more than just the delivery of services. That is absolutely right. The title indicates the importance of that: Strong Local Leadership—Quality Public Services. That is what the people want who elect local authorities and who enjoy the services they provide. We want people to have more choice. The noble Baroness neatly side-stepped that issue by saying that that is a debate that could last five hours and, sensibly in my view, did not engage in that argument at that stage. She welcomed the reduction of the bureaucratic burden and the freedom to innovate and drive up standards, which she said must include the freedom to get things wrong—that is right in certain circumstances.
	Drawing attention to the fact that 50 cases were reduced and 30 were being considered, the noble Baroness asked how many consents were still required. I do not know how many are left. I shall write to her on that specific issue.
	The noble Baroness also asked me to confirm that local authorities have the power to charge for services. We shall make an order to give local authorities the power to charge for all discretionary services. If they have the power to decide whether to provide a service, they will also be able to decide whether to charge for it. That will encourage authorities to provide services that they do not currently provide.
	The noble Baroness then asked about a level playing field with the private sector. I invite her to look, at her leisure, at paragraphs 3.76 and 3.82 in part 1 of the White Paper. She also asked about the White Paper's proposals for the Best Value regime. It proposes the publication of the Best Value performance plan in June and its incorporation within the corporate assessment process; the publication of summarised performance information in March for the public, but with local discretion over contents and method; amendments to the Best Value review framework and guidance so that reviews become more effective and strategic; and an increase in the pressure and capacity for greater diversity in service provision and choice for local people.
	The noble Baroness raised the question of whether intervention should be only through elections. We think not. If councils are performing poorly and the quality of service to people in the area is poor, local people are entitled to expect steps to be taken to ensure that the services and the leadership improve.

Lord Jones: My Lords, with partnership, autonomy and initiative in mind, will local authorities still be able to attract footloose inward investment to their areas? Will they still be able to enhance, protect and buttress job prospects in their areas? Will there be more or less money under the new scheme that my noble friend adumbrates in the White Paper? Are there any details on that important work of local authorities?

Lord Falconer of Thoroton: My Lords, local authorities do important work on attracting inward investment to their areas. High-performing councils—those that provide good services and good local leadership—will attract inward investment to their areas. The White Paper does not deal with the amounts of money available. That must wait for another occasion.

Lord Maclennan of Rogart: My Lords, the Government's proposed changes for local government will be welcomed in so far as they result in a reduction in excessive central prescription. Much of what the Minister has said about expenditure—particularly on allowing freedom of borrowing without consent, subject to satisfaction that the debt can be serviced—seems to move in that direction.
	However, the Government have much less to say on the fiscal side. The Minister has mentioned charging. What consideration, if any, have the Government given to allowing greater autonomy in respect of taxation? In particular, has any thought been given to the possibility of moving towards a more responsive form of taxation, such as local income tax, which has long been considered the best way to hold local government to account?
	Has the Minister noticed that, following the report of the Kerley commission, the Scottish Executive have addressed the issue of greater local accountability by agreeing to seek to introduce a new system of election to local government by proportional representation? We look forward to seeing the timetable for that before the end of the year. Have the minds of Ministers south of the Border been similarly moved in that direction?

Lord Falconer of Thoroton: My Lords, the answer to the last question is that the White Paper contains no proposals for a change in electoral system along the lines referred to by the noble Lord. Ministers have also not been persuaded by the arguments for a local income tax and the idea plays no part in the proposals. The noble Lord was talking about making local authorities more accountable. The White Paper makes it clear that the performance of local authorities will become much more transparent and the delivery of services and the quality of local leadership will play a much more important part hereafter in the way in which they perform their duties.

Lord Smith of Leigh: My Lords, I declare my interests as a leader of a local authority and as a member of the board of the Improvement and Development Agency, which is mentioned as part of the proposed system for improving local authorities. I welcome the Statement with much greater enthusiasm than it has received from other parts of the House. Local authorities should be judged on their outcomes, not by regulation from civil servants. The financial changes that my noble and learned friend outlined are welcome to many authorities. Unlike the noble Baroness, Lady Hamwee, I would like greater turbulence rather than stability. Those at the bottom of the heap need significant changes in the system of local government finance.
	I agree with the noble Baroness's comments on the need for a change in attitude. If the White Paper is to be a success, a change in attitude is needed from departments, from Ministers—the noble Baroness gave an example of not all Ministers singing from the same hymn sheet, at least before the publication of the White Paper—and from civil servants. This week I received a letter from the Government Office for the North-West about a lighter touch approach to the accreditation of local strategic partnerships. The guidance says that it should not be too time-consuming or paper-based. We were then invited to give a submission on 20 pages of A4 for our local strategic partnership plan. We need to get through to civil servants that we can be judged in other ways than on the volume of paper that we produce.

Lord Falconer of Thoroton: My Lords, I thank my noble Friend for his welcome for the White Paper. I thoroughly endorse his comments about the need for a new culture involving a genuine partnership between local and central government. I also thoroughly endorse his call for a much reduced burden of bureaucracy, not just on identifiable issues such as the consents regime, but in the ongoing, day-to-day relationship between central and local government. We do not want too much paper. We want outcomes that central and local government both aspire to in public services.

Lord Brooke of Sutton Mandeville: My Lords, into which of the interesting new performance categories for local authorities would the Government put their own performance? Secondly, while I appreciate that it would not be a new Labour Statement if it did not claim to represent a new basis for local government, given recent history, on what does the Minister found his confidence that the White Paper will provide a lasting basis? Finally, how does the Minister justify contingent intervention as a move away from centralisation?

Lord Falconer of Thoroton: My Lords, on the noble Lord's first question, it would be wrong for me to say in which category I should place the Government until the Audit Commission has gone through the process that I described earlier.
	Secondly, the noble Lord asked about the confidence that we have that the arrangement will deliver a new culture and vision for local authorities. One does not get anywhere without first setting out a new policy framework. The way in which one changes policy and achieves new delivery is by setting out what one thinks the function and structure should be. That is what we have done in the White Paper. There is a real and genuine commitment on the part of central government to deliver that. The feeling that one gets from local government is that it is very much Xup for" this relationship with central government. It wants to make that relationship work because people—the electorate—are keen to see delivery, which will occur only with a genuine partnership between central and local government.
	Thirdly, the noble Lord asked how one justifies contingent intervention as being not too centralised. That is a slight re-phrasing of his question. The purpose of contingent intervention is that one in effect lays down the outcomes that one wishes. Local authorities then have the discretion to deliver them, having agreed the priorities with central government, and to decide on the way in which they are delivered. If they are not delivered, the people in the district who are covered by the local authority area are entitled to have steps taken to ensure that the services that they get are as high as those that are delivered by better-performing councils.

Baroness Sharp of Guildford: My Lords, I want to press the Minister a little further on that point. If he is genuine about wanting to create a partnership between local authorities and central government and if he is saying that he wants proper local accountability, can he explain why he thinks that it is necessary to have intervention between elections? Such intervention is not available in relation to central government. If there are to be elections annually in any case, why are the electorate not being trusted in such cases?

Lord Falconer of Thoroton: My Lords, because without intervention one has not got the means of ensuring that the basic outcomes, standards or performance targets that one sets will be delivered.

Baroness Sharp of Guildford: My Lords, who sets the outcomes? Why should central government do so when we want the electorate to judge the matter?

Lord Falconer of Thoroton: My Lords, as the local government White Paper makes clear—this was strongly supported by the Local Government Association—those targets and outcomes will be set through consultation between central and local government. At the local level, they will be reflected in local PSAs. Local government has warmly welcomed such an intervention and process and it is in practice keen for that partnership to be set up.

Baroness Billingham: My Lords, I warmly welcome the White Paper and I stress how important it will be. My involvement in local government goes back some 10 years. I now have a new role—I chair an urban regeneration company—which makes it clear that local government is one of the most important parts of local democracy. In relation to urban regeneration, I cannot stress how important it is to have a partnership with local councils that are confident, capable and vibrant. Since taking up that new role, it has deeply depressed me during the past year to find out how much of that has been lacking. Much has been lost from local government's previous performance.
	A spin off from the proposals is that there will be a regeneration of local democracy—getting more people out to vote—and, if we give local councillors more responsibilities, as the White Paper suggests, we will get a better calibre of person. Such people will put themselves forward for a very demanding role. Local councillors receive little thanks but plenty of kicks, and shouts from the doorstep of, Xwhy haven't we seen you since last year?" It is a thankless task. I want local councillors to be given credit where it is due and for the fine job that they do. I hope that the White Paper will enhance their reputation and help them to deliver services where they are most properly delivered; namely, at local level.

Lord Falconer of Thoroton: My Lords, I thank my noble friend for the welcome that she gave to the White Paper. I know that she is the chairman of an urban regeneration company in Corby and I pay tribute to her for the work that she has done over a long period in that regard. I agree enthusiastically with her that when a local authority is engaged with partners such as urban regeneration companies, which bring people together, results are delivered on the ground. I also agree with her that one of the aims of the White Paper—one of its visions for local government—is to encourage more people to become engaged in local government because of the huge importance that it plays in people's lives. Involving people of calibre in local government is vital to the nation's well-being.

Baroness Miller of Chilthorne Domer: My Lords, under the proposals, will rural councils—in particular, sparsely populated councils—finally receive a settlement that ensures that in education, for example, they do not receive hundreds of pounds less in relation to children than urban areas? Secondly, with this rather blunt instrument of a scorecard, how will the Audit Commission measure an organisation that is set up by a council—a development trust, for example—and which functions effectively, but which delivers all of the goods for the people in that area? How will that be judged? The point raised by my noble friend Lady Sharp would be covered in such a case. People would see something happening as a result of the body that was set up by a council and which was no longer directly owned or managed by it but which was nevertheless beneficial.

Lord Falconer of Thoroton: My Lords, the noble Baroness's first point was about whether the financial settlement would ensure that rural areas were treated fairly—those are not quite her words. The answer, as I said in an earlier response, is that we have indicated that the old financial settlement system has gone and that the Secretary of State has indicated that he will share his views on what the new process should be next year—the provisions will come into effect the following year. That issue is for another day, and is not really dealt with in the local government White Paper.
	I turn to the question of how the assessments will be made by the Audit Commission. I gave a long answer earlier in which I set out what its assessment methodology will be. Plainly, it will have to take into account the sorts of issues to which the noble Baroness referred. Its methodology will be piloted and developed in consultation with local government and other relevant parts of the public sector to ensure that it is effective and insightful.

Baroness Maddock: My Lords, could the Minister clarify the situation regarding capital spending? Councils are currently not allowed to borrow money to build housing, for example. Having listened to the Minister's Statement, it is not clear whether there will be a change and whether councils will be able to borrow money for that purpose. Will he clarify the matter?

Lord Falconer of Thoroton: My Lords, the local government White Paper gives local authorities greater freedom to borrow. That borrowing will have to be within prudential limits, which will be set in such a way that only borrowing that they can service can be made.

Lord Greaves: My Lords, the White Paper comes out, perhaps providentially, on the same day as four other reports that had been promised on last summer's race riots—if that is what they were—in Bradford, Oldham and Burnley. The Minister will be well aware that some of the problems in those towns, and in many similar towns in the north of England, are due to the failure and collapse of the housing market, which means that there are very cheap properties that people are not able to modernise or deal with adequately. The White Paper refers briefly to that problem on page 92 in paragraph 5.3. However, a few pages later, on page 98, it suggests that all that the Government are going to do is to have a review of the HIP system and that nothing will change for two years. Can the Minister give any hope that not only Bradford, Burnley and Oldham but many other towns like them and many other local authorities in the same situation will be able to access greater resources during the next two years in order to help them to begin to tackle those urgent problems before the review takes place?

Lord Falconer of Thoroton: My Lords, the urgent problems to which the noble Lord, Lord Greaves, referred were those which he raised with me in a question about 10 days ago. That question related in particular to East Lancashire and went way beyond the towns hit by disturbances in the summer of this year.
	This paper does not seek to deal with the level of resources for housing; nor am I in a position to make any comment about what will happen with regard to that level of resources in the next spending review. However, as I made plain in answer to the question raised by the noble Lord about 10 days ago, the Government are well aware of the problems of market failure and the extent to which in some parts of the country those problems have contributed to disturbances and, in every case, to significant deprivation.

Anti-terrorism, Crime and Security Bill

Proceedings after Third Reading resumed.
	Clause 34 [Construction]:
	[Amendment No. 5 not moved.]
	Clause 39 [Racial or religious hatred offences: penalties]:

Lord Campbell of Alloway: moved Amendment No. 6:
	Page 20, line 42, leave out Xor religious".

Lord Campbell of Alloway: My Lords, this amendment is consequential upon the changed structure of Part 5, which now excludes religious hatred offences but retains religiously aggravated offences under Clause 38. This will involve a technical amendment to Section 37(3) of the Public Order Act 1986 and will require the attention of a parliamentary draftsmen in due course if that is acceptable to the Government.
	If the new structure were to be acceptable to the Government, it would resolve the essence of the problem with which the House has been concerned. It was identified by the right reverend Prelate the Bishop of Birmingham on 15th October. He said that in this country Islam is generally perceived as an Asian religion. Therefore, attacks on Islam are used as a cover for incitement to religious hatred against people of Asian origin. That analysis was accepted by the noble Lord, Lord Rooker, at col. 371 of the Official Report for 15th October 2001.
	If the record of enforcement of these racial hatred offences under extant law were to be increased from the 47 cases over five years to which the right reverend Prelate the Bishop of Oxford referred, there would be no need to introduce a new Bill at all. There is a hope that the Government will accept Part 5 as it stands as a fair and reasonable resolution of the problem with which we have been grappling for days, and that they will accept Part 5 as it stands with this consequential amendment and not undo the work of this House as is threatened in the newspapers. I beg to move.

Lord Monson: My Lords, when the Minister comes to reply, I wonder whether he could tell us—this is germane to the amendment—first, how many sentences of more than 18 months' imprisonment have been imposed for racial hatred offences in the 15 years since the Public Order Act 1986 came into force; and, secondly, whether the judiciary has ever complained that the current two-year maximum is too low and fetters its hands. If the answer is no then it appears that the near quadrupling of the maximum sentence to seven years is a public relations gimmick—or Xspin", as we are now meant to call it—designed to give the impression of the smack of firm government.
	Do the Government and, indeed, the Opposition, realise what the change to Section 17 of the 1986 Act made in what is presently Clause 36 of this Bill means? It will now be an offence to stir up hatred against any national group anywhere in the world. Thus, if this Bill had been in force exactly 60 years ago—that is, on 11th December 1941, when Britain was fighting for its life against the Axis powers—it would have been an offence, punishable by seven years' imprisonment, to stir up hatred against the Germans or Japanese. Is that what the Government intend? Surely not. Does this not show the dangers of legislating in such haste?

Lord Hylton: My Lords, I support the amendment in the name of the noble Lord, Lord Campbell of Alloway, and I hope that the Government will be able to accept it. It gives me the opportunity to return to a point that I raised in Committee concerning the level of penalties. It is proposed to increase that level by a factor of three and a half. The noble Lord, Lord Rooker, was kind enough to say in Committee that that reflected the wish of the Government to send a strong signal to the courts pointing out the gravity of this type of offence. I accept that, and that is why I withdrew some later amendments. However, a multiple of three and a half seems to be excessive. I should have thought that a multiple of two would be perfectly adequate.
	Perhaps I may make one further point. I believe that from now on there will be a need to review the working of the law, both with regard to racial hatred and also, in so far as Clause 38 becomes law, in relation to religiously aggravated offences. No doubt both types of offence convey a kind of theoretical protection. But I wonder what that is really worth in practice and whether, with the benefit of a review, something better could eventually be produced.

Lord Avebury: My Lords, I am not absolutely sure that the level of maximum penalties has much of a deterrent effect when the courts seldom approach the limits which they are given under the statutes. The noble Lord, Lord Monson, will know better than I do how the law on religious hatred has been applied in Northern Ireland. He asked a question the other day which elicited the fact that, during the currency of the religious hatred offence on the statute book in Northern Ireland since 1987, there have been four prosecutions and the maximum sentence imposed by the courts has been six months compared with the two-year maximum.
	I ventured to draw attention to that the other day—perhaps it was yesterday; I lose track of the time as we discuss this Bill every day—because it seemed to me that it gave the lie to people who alleged at that time that having an offence of religious hatred on the statute book would lead to many frivolous or unfounded prosecutions. It certainly has not done so in Northern Ireland. However, in the context of the current discussion, I have doubts about whether increasing the penalties when the courts have not even nearly approached using the existing penalties would have much of a deterrent effect.

Lord Dixon-Smith: My Lords, I rise to give general support to the amendment proposed by my noble friend and to comment in particular on the interesting point raised by the noble Lord, Lord Monson. Of course, when one examines the Crime and Disorder Act 1998, which is relevant to our discussions today, I believe that one must conclude that the Bill did not contemplate a wartime situation. I suspect that in such a situation it would be difficult to apply the Act as drafted. It is also worth noting that in that Act some of the racially aggravated assaults carry penalties of up to 14 years' imprisonment. Therefore, long sentences are envisaged in that area.

Lord Rooker: My Lords, I admit that until the short speeches we have just heard I was not entirely clear about the purpose of the amendment. If there is to be argument about the penalty increase from two years to seven years, frankly, that is a different ball game. I do not think that that was debated either in Committee or on Report.
	If the issue is trying to strike out any reference in the Bill to religious hatred rather than seeking to argue that there should be a difference in sentencing between two elements of the same offence, I can reassure the noble Lord, Lord Campbell, that should the provisions in what was Clause 39 (the offence of incitement to religious hatred) not be included in the Bill on Royal Assent, the reference in what is now Clause 39 (incitement penalties) will be removed as a primary change. It will be like renumbering the pages. An amendment will not be needed for that to be done. It will be taken out automatically.
	Other noble Lords raised the issue of the increase in maximum penalty from two years to seven years. I understand that in 1998—I do not have the details of the case; it was not in Northern Ireland but in England—the judiciary complained that two years was too low. I shall write to the noble Lord with details of the sentences in the particular issue he raised. We want to send a signal; there is no question of that. It is not for me to criticise the judiciary and the sentences passed within the range provided. Maximum sentences are not always used. Discretion is given to the courts. We believe that it is entirely sensible that, as is the case in Northern Ireland, if there is to be an offence of inciting religious or racial hatred, the penalty for the offence under either of those elements should be the same and should be set at seven years. We must accept that legislation for the crime of religious hatred already exists. I shall write to noble Lords. A fair point was raised about how much the penalty is used. I understand that there were complaints from the judiciary two or three years ago.
	As regards Clause 36, I have nothing to add to what was said, if anything was said, during the passage of the Bill. I do not recall this matter ever being raised. Therefore, I understood that to have the consent of the whole House.

Lord Monson: My Lords, before the Minister sits down, does he realise that one good reason for not having disproportionately long maximum sentences is that they seem unfair to the man or woman in the street? Therefore, juries may be reluctant to convict in such cases.

Lord Rooker: My Lords, for obvious reasons, because of the time I spent in the other place, I have never served on a jury. All I can say is that that is up to juries and the courts. The courts are given discretion. It is up to them to use it.

Lord Campbell of Alloway: My Lords, I shall be brief. I thank all noble Lords who have spoken on this matter. In particular, I thank the noble Lord, Lord Rooker, who assures the House, as I had hoped, that these matters will be taken into account automatically by the parliamentary draftsman if the structure of the Bill remains as it is when it comes back to us from another place. For that, I am grateful. I assure the noble Lord, Lord Rooker, that it was not my purpose to question the seven years' maximum sentence. If I have a purpose I table it in an amendment. In a curious way, although it is excessive, I support the seven years' maximum penalty because it is a maximum. I cannot imagine it being imposed by any sane judge or magistrates unless there is a serious situation—at times there are—which warrants it, and it serves as an effective deterrent. That is why I have not questioned it.
	I thank the noble Lords, Lord Hylton, Lord Avebury and Lord Monson, for their contributions. I fully understand their reservations, which no doubt will be taken into account. I also thank my noble friend Lord Dixon-Smith for the trouble he has taken to make such a well informed contribution to this small debate. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 78 [Prohibition of disclosures in relation to nuclear security]:
	[Amendment No. 7 not moved.]

Lord McNally: moved Amendment No. 8:
	Page 40, line 16, at end insert—
	X(2A) In proceedings for an offence under this section it is a defence for the accused to show that the public interest in disclosure of the information relating to the transportation of nuclear material outweighs the public interest in not prejudicing the security of that material."

Lord McNally: My Lords, Amendment No. 7 was not moved in an attempt to show the Minister that we are approaching this matter with, to use his favourite word, proportionality. In looking after the nuclear industry, it is important to recognise the threat posed by international terrorism, either by direct attack on nuclear installations or by attempts from terrorists to gain access to nuclear material.
	The dilemma is that there is a continuing national debate about the role of nuclear power and its peaceful use in our energy mix. It seems to many that the Bill as drafted could restrict genuine debate about the nuclear industry. It could also restrict the public from having legitimate information about the nuclear industry. Amendment No. 8 attempts to get right the balance in terms of public interest. It also attempts to recognise that there may be times when the public interest in being aware of various developments outweighs the security powers given in the Bill. This is simply a public interest defence written into the Bill. In terms of joined-up government, the amendment also raises the question of how much the Bill restricts and prevents the public having access to information to which they will have a right when the Freedom of Information Act comes into force in January 2005.
	On consideration, we felt that Amendment No. 7, which we have not moved, tilted the balance between security and the right to know in the wrong direction. However, we remain convinced that Amendment No. 8 is one which the Government could accept in the genuine public interest of having an informed debate about the future of the nuclear industry.

The Lord Bishop of Portsmouth: My Lords, this is a reasonable amendment. It is certainly in line with the atmosphere of freedom of information. These Benches support it.

Earl Russell: My Lords, I declare an interest since I live within about 100 yards of a route regularly used by a train carrying nuclear matter. This is an exceptionally well-drafted amendment. Indeed, it is one of the best drafted amendments in the Bill. It raises a difficult test, but that is because it is the real test. It is the test of what we actually need to know before we disclose information about the transport of nuclear material.
	I share my noble friend's concern about access to nuclear material and his concern about the risk. But there is also the concern, sometimes misplaced—I have been assured by expert opinion that in my own case it was largely misplaced—about the safety of people living near a line where nuclear material is transported. But those matters should be balanced against each other. It is a necessity. If we do not try to balance them against each other, sooner or later, there will be a situation where public protests will force us to do so. So why not do it voluntarily before we have to?

Lord Avebury: My Lords, there have been two cases in the Russian Federation, one of which I mentioned the other day—that of Grigory Pasko—and the other one is that of Alexsandr Nikitin, in which this very issue has been brought before the courts. Chronologically, the first of the cases, Alexsandr Nikitin, a former captain in the Soviet Navy published a report through Bellona in Norway concerning nuclear materials which were stored in the Kola Peninsula in the North West of Russia.
	Mr Nikitin showed from his researches that vast quantities of surplus reactors and redundant nuclear material were stored in the Kola Peninsula without proper safeguards as to the dissemination of radioactivity and radioactive material which might arise from the lack of care devoted to its retention. Mr Nikitin was charged with very serious offences in the Russian courts.
	Now there is another case which has arisen in relation to the Soviet Pacific Fleet of a similar nature. Both Captain Nikitin and Mr Pasko pleaded in their defence that the public interest of disclosure was an important factor in releasing the information, although they denied that they had breached any security rules.
	It is impossible to underestimate the importance of the first case—that of the Kola Peninsula—because if this material was released into the ocean or the atmosphere it could have immense consequences, not only for the whole of Europe but for the world as a whole. Most people thought that Captain Nikitin had performed an important and invaluable public service in making sure that this information got into the public domain.
	I am horrified to think that a prosecution could now take place in the United Kingdom of someone who genuinely wanted to blow the whistle on some practice that was unsafe and was harmful, not just to the people of the United Kingdom but perhaps far wider than that. The Irish are an obvious example because they at present are in dispute with us over the release of radioactive material into the Irish Sea. People who genuinely believe that what they are doing in releasing information is for the benefit not just of Britain but of the whole of mankind could be prosecuted. I hope that the Minister accepts my noble friend's amendment.

Lord Monson: My Lords, I agree with the noble Earl, Lord Russell, that this is a balanced and well drafted amendment. For what it is worth, I wholeheartedly support it.

Lord Rooker: My Lords, the noble Lord, Lord McNally, stumped me again by not moving Amendment No. 7. Yesterday, these were Amendments Nos. 103A and 103B. I had a nice combined speaking note for both. I decided that because I had marked them up that I did not want to be given fresh copies because I would have to do all that work again. Therefore, I have yesterday's notes. I have gone through them. The clause numbers have changed as well. That does not help matters. But that is my responsibility. I shall not get sucked into dealing with Amendment No. 7 but will concentrate on Amendment No. 8. If I need to refer back to the other issues I shall.
	This issue should not be a problem for noble Lords. The amendment is well drafted. I am not arguing about that. It simply says that,
	Xit is a defence for the accused to show that the public interest in disclosure of the information relating to the transportation of nuclear material outweighs the public interest in not prejudicing the security of that material".
	It is essential to protect detailed information about routes and time schedules and the nature of the material being transported until the movement begins. Currently, it is an offence that applies only to companies. The reason that these clauses are worded in this way is to relate them to individuals. It is important that we ensure security. If there is disclosure of information in advance of the movements, I do not see how that can be in defence of the public interest. Therefore, it goes against the objectives of the clause.
	I invite noble Lords to continue reading because Clause 80 provides that a prosecution can be instituted only by or with the consent of the Attorney-General. The Attorney-General is able to weigh up the public interest in considering whether any prosecution should be brought.
	I want to make another point. I refer to Clause 78 of the Bill. That states that an offence would be committed only if there is deliberate or reckless disclosure of information that prejudices security. Whether an offence has been committed will depend on the facts of the case. That is for the courts to assess.
	I point out that there is a great deal of information on nuclear transport that has no security implications. This is not in any way intended to be an attack on monitoring by environmental groups on where nuclear matter is moved around the country. People standing and observing on bridges and railway lines can hardly be prejudicing security because they are collecting public information. The same applies to the disclosure of information already in the public domain. The dissemination of that information is very unlikely to fall within the offence here.

Lord Lester of Herne Hill: My Lords, I am grateful. Does the Minister therefore agree that the offence in Clause 78(1) would have to be read narrowly to conform to the right of free expression under Article 10 of the European human rights convention read with Section 3 of the Human Rights Act? Therefore, if there is a compelling public interest in disclosure that would have to be taken into account by way of defence.

Lord Rooker: My Lords, I assume that that would be the case. Clause 78(1) states that the disclosure is,
	X(a) with the intention of prejudicing that security; or
	(b) being reckless as to whether the disclosure might prejudice that security". That is powerful language, in which a defence can be mounted, as I have explained.
	We are talking about protecting advance information on the transport of nuclear materials and the details of the security measures which apply to specific shipments. That disclosure would be prejudicial to security. There is no question about that. So it is disclosure, not monitoring of that type of information, that is of concern. Sometimes nuclear material, even waste material, must be moved around the country. It cannot always be left where it is. There are different levels of waste and nuclear material. A correspondent often said to one of my right honourable friends as he defended the industry, XYou should have it all in your backyard". Drigg, where all the hospital nuclear waste goes, is in the Copeland constituency of my right honourable friend. It is in his backyard.
	The X-ray departments of hospitals in this country could not function if the disposal of low level waste could not be accommodated. That is not the central issue here.
	As far as I know, over the past 30 years within the UK our transport arrangements have been in conformity with the International Atomic Energy Agency's standards. There have not been any incidents here involving serious injury or death or significant harm to the environment. The fact is that we are not after environmental monitoring. We are after advance notification of movements and shipments, where security could be put at risk.

Lord Lester of Herne Hill: My Lords, I am not sure that the Minister appreciates the force of my question. Perhaps I may I explain it and see whether he agrees with me. The prohibition on disclosure relates to nuclear security. It is therefore a restriction on free expression. Under the European convention it must be no more than is necessary in a democratic society—it must be proportionate. Does he agree that, in any event, Clause 78 must be read subject to the Human Rights Act 1998, so the principle of proportionality must apply to the offence?

Lord Rooker: My Lords, that may be so. As noble Lords know, I cannot understand all this because I am not a lawyer, only a humble engineer who, once upon a time, made things that people find useful rather than destroying their reputations.

The Lord Bishop of Portsmouth: My Lords, at the risk of pulling the Minister's leg, is being an engineer better than a lawyer in his present situation?

Lord Rooker: My Lords, as I said, we make things; lawyers destroy people's reputations. I am not winding noble Lords up. I have taken an agnostic view in the past, but the fact is that this country's engineering skills are incredibly good, and we lead internationally in many such fields. We take an active part in discussions to improve the level of nuclear safety in areas of the world where improvements are needed.
	The clause does not prevent disclosure of other information relevant to the nuclear industry—whether relating to safety, health or other such matters where people may feel it important to whistle-blow. We are committed to being as open as possible on nuclear policy. Inherent, sometimes unnecessary secrecy has caused difficulties in the past. If we are open and mature, we can take people with us.
	I hope that I can answer the noble Lord, Lord Lester of Herne Hill. By definition, the provision is subject to human rights requirements. Obviously, there must be a balance of recklessness. Someone must decide in the first place whether the action is sufficiently reckless to prejudice security. I reiterate that it will not cover environmental monitoring or whistle-blowing on health and safety matters. It is about giving advance notice of transport movements that leaves them open to attack.
	I reiterate that prosecutions will occur only by or with the consent of the Attorney-General. That is an important safeguard.

Lord McNally: My Lords, I know that the noble Lord, Lord Rooker, has been on this Bill for a long time, but he has just missed a great opportunity. The person who made the jibe about his being an engineer was the noble Lord, Lord Rees-Mogg, in The Times. He is a journalist. There was a marvellous opportunity to unite the lawyers and the engineers in a joint condemnation of the journalists—a real missed opportunity.
	Our motivation in moving the amendment was to ensure that the clause would not be used to stifle genuine debate on the future of the nuclear industry or to stop genuine monitoring of the kind of issues that the Minister referred to in his closing remarks. I hope that there will be enough in his clarification to reassure interested groups. In that spirit, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 80 [Part 8: supplementary]:

Lord Dixon-Smith: moved Amendment No. 9:
	Page 42, line 3, at end insert—
	X(d) any person illegally resident in the United Kingdom. or
	X(e) any person resident in the United Kingdom and seeking United Kingdom citizenship."

Lord Dixon-Smith: My Lords, the amendment arises from a debate during the third day of debate in Committee, at col. 682, when the noble Lord, Lord Sainsbury of Turville, was answering our questions. My noble friend Lord Elton questioned the term Xa United Kingdom person", asking who or what was such a person. The noble Lord, Lord Sainsbury of Turville, subsequently wrote, as he had undertaken to do, to define who or what is a United Kingdom person and what is the Government's policy. As a result of that letter, I conclude that we need to consider a gap.
	Clause 79 gives the Secretary of State power by regulation to create an offence of trading or giving away information abroad about either fissile material or nuclear information for UK persons. In other words, if any of us get hold of nuclear information and trade it abroad, we can properly be charged with an offence.
	So the question of who is a United Kingdom person is relevant. The description is carefully provided by the Government in Clause 80. It states:
	X'United Kingdom person' means a United Kingdom national, a Scottish partnership or a body incorporated under the law of any part of the United Kingdom . . . For this purpose a United Kingdom national is an individual who is . . . a British citizen, a British Dependent Territories citizen"—
	and so on—
	Xa person who under the British Nationality Act 1981 . . . is a British subject; or . . . a British protected person within the meaning of that Act".
	Our little amendment goes slightly further. Within our country we have people who may hope to become United Kingdom citizens. The last thing that they would want to do is to acknowledge as their place of residence the country that they came from. We also know that we have a large number of illegal immigrants. I say that we know; we do not know, but everyone makes the pretty good guess that we have.
	I mention that the Bill is an anti-terrorism Bill. That is in its title—until we have amended it, perhaps. We must consider possibilities. It is an unfortunate and frightening fact that the events of September 11th were described in a good book in fiction about a decade ago. There is the awful possibility that it was read by both the security services in the United States and by Osama bin Laden or his minions. The inspiration for that dreadful crime could well have come from what was supposedly an innocent work of fiction.
	We must then consider the two groups of people in this country that I mentioned, who are either living illegally under cover as United Kingdom citizens or are seeking to become United Kingdom citizens. It is not inconceivable that they could go abroad to trade in nuclear information or in fissile material and then return here. They would then be in a privileged position, because even if we subsequently traced that criminal action, under British law, because they were not United Kingdom citizens, they could not be charged with the offence.
	That is an unsatisfactory situation. While I am prepared to accept that the wording of the amendment may not be wholly satisfactory, I invite the Government to take on board that serious issue and see if they cannot find some way to resolve it before the Bill's proceedings are completed. I beg to move.

Lord Rooker: My Lords, the amendment seeks to extend the category of people who can commit these offences. I want to make it clear that anyone who commits an offence within the UK under the provisions of this part will be caught by it whether or not he or she is a UK citizen. Therefore, the first paragraph of the amendment is not necessary. I realise that when one looks at the drafting that might not appear to be the case and I am seeking more advice—

Lord Dixon-Smith: My Lords, I am not concerned with anyone who commits the offences within the United Kingdom. That is not the difficulty. The problem is with the person who travels abroad and commits the offences, but on return to this country is not so chargeable.

Lord Rooker: My Lords, I am sorry; I have mislaid my copy of the amendment. Someone illegally resident in the UK will be caught by this part.
	Clause 80 provides that the offences in Clauses 78 and 79 can be committed outside the UK but only when they are committed by Xa United Kingdom person" as defined in the Bill. We fully admit that that is a limitation provision. It reflects the policy of exercising extra-territorial jurisdiction very sparingly indeed. We assert such jurisdiction only in respect of XUK nationals", or a similar definition, in justified cases; for example, where we are required to do so under international obligations or where the crime committed is considered to be particularly serious, as in this case.
	Any further extension of jurisdiction to those other than UK nationals has been limited to the few areas where there is international consensus and where there are treaties on the matter; for example, international rules and conditions exist in respect of hijacking and piracy. We do not believe that the right conditions are in place for taking the approach proposed in respect of offences under Clauses 78 and 79. For the reasons I have given, we do not intend to seek a further extension of jurisdiction.
	The situation is hypothetical and I take the noble Lord's point about the planning taking years. However, I humbly point out that I have made that point more than once from this Dispatch Box as the Bill has been going through the House. I have tried to persuade noble Lords not to make some of the technical adjustments to the Bill which they have then made.

Lord Dixon-Smith: My Lords, I should say, XTouche", but we submit that we have not changed the substance of the Bill. We have sought to remove the extraneous matter from it and by and large that is what we have done.
	The Minister does not surprise me with his answer. However, I am bound to say that he does disappoint me. It strikes me as somewhat paradoxical that a genuine UK resident could be at a disadvantage compared with someone who might be living here illegally. I agree that we are dealing entirely with hypothetical situations and we must all hope that they remain hypothetical. Perhaps none of us will know the answer to that.
	I should have preferred to hear the Minister say that he could consider this little local difficulty. He has not chosen to do so but I do not intend to press the amendment. I beg leave to withdraw it.

Amendment, by leave, withdrawn.
	Clause 102 [Codes and agreements about the retention of communications data]:

Lord Rooker: moved Amendment No. 10:
	Page 62, line 27, leave out subsections (3) to (5)

Lord Rooker: My Lords, I rise to move Amendment No. 10 and to speak to the other amendments grouped with it. I shall be brief because we debated the matter last Thursday when I promised to bring forward an amendment to introduce parliamentary approval of the voluntary data retention codes of practice. It will provide a further safeguard to ensure that data protection and human rights legislation is complied with. Together with the duty to consult the Information Commissioner and the industry, it will, I hope, ensure that an appropriate balance is struck between security and civil liberties.
	The practical effect of the amendment is to split the process of drawing up the code of practice into two stages. First, there will be a consultation with the parties directly involved: the service providers, the law enforcement agencies and the Information Commissioner. That will lead to the publication of a draft code. The next stage is a period of public consultation when comments will be welcomed from any quarter, irrespective of whether people were consulted in the first place. Following that consultation, the code will be laid before Parliament for approval by the affirmative resolution procedure.
	The same process will apply to any subsequent revisions, including any necessary transitional arrangements for moving from the initial code to later versions. For clarity of drafting, the first clause of this part of the Bill, covering the voluntary scheme, has been split into two. The proposed amendment sets out the principles of the voluntary provisions in one clause and the mechanism for setting it up in a second. I believe that that goes a considerable way to meeting the points which were raised during our debate a week ago and I therefore hope that noble Lords will support the amendment. I beg to move.

Lord Lester of Herne Hill: My Lords, I support the amendments, but I want to draw the attention of the House to the fact that, as frequently in the recent past, legislation is being enacted which will not work as noble Lords believe that it will if all that they read are the words in the Bill. That is because the words in Clause 102 and in the proposed code must be read in accordance with the Human Rights Act. I am beginning to feel a little guilty about continually mentioning the Human Rights Act—

Lord Pearson of Rannoch: Hear, hear!

Lord Lester of Herne Hill: My Lords, I am pleased that the noble Lord, Lord Pearson of Rannoch, is being entirely consistent in his opposition to anything which smacks of Europe, even when it concerns the fundamental rights and freedoms of British citizens and others in this country. I want to make the point because it is important. I remember making it in connection with the data protection legislation and a series of other measures.
	I shall begin at the beginning. On 4th December (at col. 791 of the Official Report) the Minister properly made it clear that the code of practice and the agreement would not be drafted in a way that was incompatible with data protection or human rights legislation. Quite properly, he repeated that statement today.
	Let us look at Clause 102, in the context of which the code and the proposed code are to be made. Clause 102(6) states:
	XA code of practice or agreement . . . may contain any such provision as appears to the Secretary of State to be necessary . . . for the purpose of safeguarding national security; or . . . for the purposes of prevention or detection of crime",
	and so forth. Clause 102(8) states that a code of practice and so forth,
	Xwould be likely to prejudice national security",
	and so forth. Clause 103(1) gives the power to the Minister to give directions about the retention of communications data consequential on what is in the codes and so forth.
	The problem is that none of that language is the same as Article 8(2) of the European Convention on Human Rights, which is the exception clause to the fundamental right to respect for personal privacy; nor is it the same as what appears in the data protection principles. The difference is that it does not use the test of necessity/proportionality—which is the key test, the fair balance test—to decide whether keeping communication data in the way that is empowered under this part of the Bill is necessary in a democratic society. Accordingly, it will be left to judges, administrators and Ministers, under Section 3 of the Human Rights Act, to give effect to Clauses 102 and 103 and to the draft code so far as possible in a way compatible with the right to personal privacy and the test of necessity. Similarly, Ministers and any other public authority will be required under Section 6 of the Human Rights Act to act in a way compatible with Article 8 of the convention—the right to personal privacy.
	In the end, if there is a dispute about any of this by anyone who is made subject to requirements—the communication providers, for example—the judges will have to take this language, both in the draft code which becomes the code and in Sections 102 and 103, and read them in a way which is compatible with the right to personal privacy.
	I very much regret that governments keep on, in spite of the Human Rights Act, using wide language as in, for example, Clauses 102 and 103. I am sure that they will do the same in the code, in a way that will lead to incompatibility with the European human rights convention and with data protection principles. It would be much better if the test that was used in legislation was the test of necessity/proportionality without this much looser language.
	Although I agree with the amendment, which is designed to enhance consultation and accords with undertakings already given, I am sorry to have to say that, unless the code itself is drafted in a way which is compatible with data protection principles and the Human Rights Act, judges will have to fit it all together in due course. Lawyers will have to be paid almost as much as engineers might receive in similar circumstances, and the lawyers will have to come to the rescue of the engineers of this Bill because the engineers will have failed in their design project and its execution. I have great respect for engineers—as much respect as I know the noble Lord has for lawyers.

The Lord Bishop of Portsmouth: My Lords, following what the noble Lord, Lord Lester, said, in spite of what I said earlier I have great respect for engineers, as the son of an architect, and also for lawyers. However, I am neither a lawyer nor an engineer but a simple soul.
	I ask a genuine question, which is whether the deletion of Sections 3 to 5 amounts to going back on concessions made earlier.

The Earl of Northesk: My Lords, I thank the Minister for honouring the commitment he gave the House at Report stage. It will come as no surprise, I am sure, that we on these Benches support the amendments.
	Of course I bow to the superior expertise of the noble Lord, Lord Lester, but it may be that subjecting the code of practice on data retention to affirmative resolution will offer a form of safeguard that it will operate within existing human rights and data protection legislation. I am grateful to the Minister for having so readily taken on board the anxiety of many on this point in Committee.
	In this context it is worth repeating that the amendments address specific concerns raised by the Joint Committee on Human Rights and the Delegated Powers and Deregulation Committee. I hope that the Minister will forgive me if I take this opportunity to seek clarification of one or two points.
	First, the tail end of subsection (1) of the new clause states:
	Xthe Secretary of State may incorporate in the code finally issued any modifications made by him to the draft after its publication."
	In effect, there is a distinction to be drawn between the draft code and its final version, as possibly modified by the Secretary of State. My difficulty here is that with this provision it is possible that the draft code would become toothless. As I read it, the Secretary of State could modify a published code at will and without consultation. I hope the Minister can offer me some comfort on that point.
	It may be carping, but I also note that in the case of a revised code the Secretary of State's requirement to consult is watered down to exclude any CSPs who would be unaffected. I can understand the motivation behind this, particularly from the perspectives of flexibility and speed, but the initial code implies consultation with all CSPs whether or not they would be affected. Why this discrepancy?
	I move to a more general point which I should perhaps have emphasised more forcefully before now. What is the Government's best estimate of the gestation period of the code of practice? I may have this wrong but my understanding is that the Information Commissioner has been working for over a year now on the code of practice arising out of the Lawful Business Practice Regulations that deal with e-mail monitoring in the workplace. Is it to be expected that the data retention code will experience a similar timescale in terms of preparation?
	I am bound to make the point that if this is indeed the case the sense of urgency that the Minister insists should be attached to Part II is somewhat undermined. I look forward to the Minister's replies on these points. In the mean time, we on these Benches welcome these amendments.

Lord Rooker: My Lords, I apologise to the noble Lord, Lord Kingsland, for this, but I do not recognise words that he quoted, either from the Bill as reprinted overnight or, indeed, Amendment No. 4. I will take advice on that, but he used words that I cannot locate. I accept that he understands that we have gone a considerable distance.
	The right reverend Prelate asks me right at the end of our proceedings whether there is anything hidden in this government concession. That is a word I have tried to avoid throughout the past eight days because it is used in a pejorative way and suggests that I am covering something up and trying to slip something through. The answer is no, we are not. This is wholly positive. The Home Secretary has willingly embraced the discussions in this House by noble Lords, lawyers and all, and we have listened. In this case what we have done is to re-write Clause 102. We have taken a chunk out of Clause 102(3), (4) and (5), and we have set up a different procedure. That is why we have entitled it XProcedures for the code of practice". Where those are revised and re-issued they will go through the same process.
	I say to the noble Lord, Lord Lester, that towards the end of his short speech he used words to suggest that if the code were written to conform to data protection principles and human rights legislation then judges would have some precision. That is exactly what we propose to do. I take his point about the annoyance that government Bills do not reflect the language of the human rights legislation, but we have said that we will draw up the code of practice so that it conforms to data protection principles and human rights legislation. If we did not do that, under a voluntary arrangement someone would be for the high jump because there would be complaints, I am absolutely certain.
	I repeat that we want to work voluntarily with industry and the Information Commissioner and everybody involved. We do not want to breach privacy. We are not looking to intrude on people's conversations; we do not want records kept of what they say on the telephone. That is not what we are about. We are not asking data providers to collect new information beyond that which they already collect, so there is no new burden. What we are asking them to do is to save it for longer. The code of practice will deal with that and make it accessible.
	If there are points made by the noble Lord, Lord Kingsland, which I have misunderstood I will happily drop him a note, but I am the good guy here on this amendment, and that is the way I should like to leave it.

Lord Lester of Herne Hill: My Lords, not only is the Minister the good guy on this amendment, but he has just demonstrated that in all respects he is also a first-class engineer. My understanding of what he has just said means that he is giving effect to the recommendation made by the Joint Committee on Human Rights; that is, that as far as is practicable, on its face the code will give effect to the standards set out in Article 8 of the European Convention on Human Rights and to the data protection principles. That is good news because it will cut down litigation and overloading of the courts. It will also ensure that Parliament does its job properly when it considers the measure using the affirmative procedure. We shall be able to bless it. The Minister's remarks have clinched it.
	We all believe that Ministers will do what they say, but the fact that the affirmative resolution procedure is in place at the end of the process will—to use the words of Archbishop William Temple, spoken in another context—Xjust clinch it".

Lord McNally: My Lords, while the Minister takes a moment to bask in the approval of my noble friend Lord Lester, could I ask him to clarify a point made by the noble Earl, Lord Northesk, concerning the period of consultation? The period of consultation for a number of codes of conduct has been extremely long. A conflict could arise between the sense of urgency attached to the legislation before noble Lords and the need to consult. Will any guillotine procedures be introduced to the consultation process?

Lord Rooker: My Lords, first I should apologise to the noble Earl, Lord Northesk, for addressing him incorrectly. This point was raised in Committee and I remember saying that the Home Office has, in a sense, moved up a gear. We do not want lengthy delays on this. It is expected—the process will be really rapid—that it will take around six months to consult and agree the code.
	It is always best to drive matters forward from the Dispatch Box. Over the past four years I have discovered that people take account of statements made from this position. I would expect to be able to bring before the House the code for consideration under the affirmative procedure before the Summer Recess next year. I should add that we do not plan for the Recess to take place during the first six months of 2002, but I am seeking to add a little finesse to the phrase Xabout six months". When I see a term such as Xabout six months", that period could stretch to seven or eight months. I shall stand at this Dispatch Box and move that the code be taken through the affirmative resolution procedure for approval before the Summer Recess. For my part and acknowledging my responsibilities in this matter, I shall try to drive the issue forward.

On Question, amendment agreed to.

Lord Rooker: moved Amendments Nos. 11 to 13:
	Page 63, line 2, after Xsection" insert Xwhich is for the time being in force"
	Page 63, line 4, after Xsection" insert Xwhich is for the time being in force"
	Insert the following new Clause—
	XPROCEDURE FOR CODES OF PRACTICE
	(1) Before issuing the code of practice under section 102 the Secretary of State shall—
	(a) prepare and publish a draft of the code; and
	(b) consider any representations made to him about the draft; and the Secretary of State may incorporate in the code finally issued any modifications made by him to the draft after its publication.
	(2) Before publishing a draft of the code the Secretary of State shall consult with—
	(a) the Information Commissioner; and
	(b) the communications providers to whom the code will apply.
	(3) The Secretary of State may discharge his duty under subsection (2) to consult with any communications providers by consulting with a person who appears to him to represent those providers.
	(4) The Secretary of State shall lay before Parliament the draft code of practice under section 102 that is prepared and published by him under this section.
	(5) The code of practice issued by the Secretary of State under section 102 shall not be brought into force except in accordance with an order made by the Secretary of State by statutory instrument.
	(6) An order under subsection (5) may contain such transitional provisions and savings as appear to the Secretary of State to be necessary or expedient in connection with the coming into force of the code to which the order relates.
	(7) The Secretary of State shall not make an order under this section unless a draft of the order has been laid before Parliament and approved by resolution of each House.
	(8) The Secretary of State may from time to time—
	(a) revise the whole or any part of the code issued under section 102; and
	(b) issue the revised code.
	(9) The preceding provisions of this section shall apply (with appropriate modifications) in relation to the issue of any revised code under section 102 as they apply in relation to the first issuing of the code.
	(10) Subsection (9) shall not, in the case of a draft of a revised code, require the Secretary of State to consult under subsection (2) with any communications providers who would not be affected by the proposed revisions."
	On Question, amendments agreed to.
	Clause 110 [Implementation of the third pillar]:

Lord Rooker: moved Amendment No. 14:
	Page 66, line 25, leave out X31" and insert XK.3"

Lord Rooker: In moving Amendment No. 14, I shall speak also to Amendment No. 15. These are genuine drafting amendments. We are not trying to change the Bill. I can assure the House that we are not trying to pull a fast one. The amendments are purely technical to ensure that the references to the 1995 and 1996 Conventions on Extradition are legally correct.
	The conventions were established under Article K.3 of the Treaty on European Union. Clause 110(2) should refer to that article rather than to one of the renumbered articles in Title VI of the treaty, which replaced the K-numbered articles. I beg to move.

Lord Pearson of Rannoch: My Lords, before the House agrees the amendments, I should like to put one or two questions to the Minister about the scope of what are now Clauses 110 and 111 of the Bill. As the noble Lord has said, they will import into legislation what is now Article 31, or what was Article K.3 before the Amsterdam treaty, together with the 1995 and 1996 Conventions on Extradition.
	The first question arises because Article 31 is to be amended by the Treaty of Nice—assuming that that treaty is ratified—to give greater substance to Eurojust, to the European judicial network, and to Europol. Can the Minister tell the House how the Government see what I think we would all agree is the pan-European police force developing? In particular, do the Government envisage that members of Europol will be able to arrest people in this country without a British policeman in attendance?
	Secondly, and perhaps far more important, is there any truth in the suggestion that the officers of Europol will have immunity from negligence? If that is so, why?
	Finally, I shall put a more generic question concerning the clauses as amended by the Government. It is clear that we are witnessing a three-pronged attack on some of our most fundamental civil liberties, all inspired far more by Brussels' quest for power than by any reasonable attempt to control terrorism. The first prong consists of these clauses in the Bill, which noble Lords have now substantially improved. The second prong comprises the proposed European arrest warrant, which we debated most recently in the course of Starred Questions earlier today, and the outcome of which we must await with trepidation.
	My question concerns the third prong of this very worrying assault; that is, the Treaty of Nice itself. In his amendments, I believe that the noble Lord has assumed that the treaty will be ratified. Do the Government agree that the measures originally proposed in these clauses, along with any that may emerge in the arrest warrant, could be brought into force under the existing treaties, but especially if the Treaty of Nice is ratified? In other words, if the Nice Treaty is ratified, or even if it is not, surely all these matters could be dealt with without any need for the Bill or for the arrest warrant? Perhaps they would have taken longer, but I think that it is important to know where we stand in the development of the competencies of the European Union. I should be most grateful for the Minister's response.

Lord Rooker: My Lords, it is kind of the noble Lord to give me an opportunity to revisit the third pillar. However, I shall decline the invitation. I have just moved two amendments, exactly the same as each other, which seek to change references to X31" from XK.3" mentioned in two separate lines in a clause over which a major debate was held yesterday in this House. I would remind the noble Lord of that. The Government made a major modification to the Bill by time limiting to 1st July 2002 implementation of the third pillar.
	I have been assured by my noble friend to my left that Europol is a good thing. The Nice Treaty has not been ratified and therefore the noble Lord's question is hypothetical. We shall have to wait until ratification has taken place. I do not know anything about immunity from negligence, except to say that such immunity would not strike me as a good thing in any walk of life. I should add that that comment should not be construed as a change in government policy. As regards the issue of UK citizens living in this country being arrested without the need for the presence of UK policemen, I find it extremely difficult to believe that such a move could be contemplated.
	I almost regret to have to say to the noble Lord that there will be bags of opportunities to debate these issues when we deal with the legislation which has already been forecast for next year. I want to take the comments of the noble Lord seriously because I realise that these are important issues. I am told continually that matters are dealt with differently in this House; we are more measured and precise. We have achieved a far better scrutiny of the Bill than would normally be the case on the Floor of the other House, even when it has more time to deal with business. However, I have to say to the noble Lord that when dealing with an amendment that seeks to change a reference to X31" from XK.3", I am limited in what I am prepared to respond to in the debate.

Lord Pearson of Rannoch: My Lords, I accept that we shall not cover all the points that I have put to the noble Lord, but he has been warned.

On Question, amendment agreed to.

Lord Rooker: moved Amendment No. 15:
	Page 66, line 28, leave out X31" and insert XK.3"

Lord Ampthill: My Lords, I believe that this amendment is to be moved formally and that the right reverend Prelate will not accuse the Minister of any mischief.

The Lord Bishop of Portsmouth: My Lords, the Minister is true to his word and this amendment has the total and 100 per cent support of the right reverend Prelates concerned about the implementation of the third pillar.

On Question, amendment agreed to.
	Clause 127 [Short Title]:

Lord Dixon-Smith: moved Amendment No. 16:
	16 Page 75, line 23, leave out XAnti-"

Lord Dixon-Smith: My Lords, I do not want to debate particle physics but I cannot help but wonder whether we are not entering the realm of Bills and anti-Bills. Only a year ago, we passed a Terrorism Bill and now we are passing an Anti-terrorism Bill. The four-letter word at the beginning of the Bill's Title is a little out of place and for the sake of consistency—and all those who may refer to these matters in future—it would be better if the measure were named the Terrorism, Crime and Security Act 2001.

Lord Elton: My Lords, presumably this is an anti-crime Bill as well. If it is not necessary to state Xanti-crime", why is it necessary to state XAnti-terrorism"?

Lord Rooker: My Lords, as I have discovered at three departments in the past four years, there are lots of rules on the titles that one can and cannot give to a Bill. I first became aware of that long before I entered the other place, in respect of the Fair Rent Bill of the now noble Lord, Lord Walker. We thought that was a very political title and there was much debate about it.
	We need to differentiate this measure from the Terrorism Act 2000. I am not aware of anyone referring in the press or on the wireless to anything other than the Anti-terrorism Bill—its Short Title. We should keep it as that. That title might annoy people when they look for the measure in an alphabetical index but it is important to avoid confusion with the 2000 Act. At this late stage, we cannot justify such a substantial change to the legislation.

Lord Dixon-Smith: My Lords, the Minister's response does not surprise me. I take the opportunity to thank him and his colleagues in respect of a period of arduous and solid work on the Floor of the House. We have not always agreed, inevitably, but I hope that relationships have remained amicable. I am grateful to the Government for the generosity of their approach, in letting us see the Bill before it was published. They have been generous with their time subsequently.
	I thank all noble Lords who have taken part in eight days of very hard work and also the Government Chief Whip, the Chief Whip of the Liberal Democrats and my own Chief Whip. They have between them worked hard to keep the show on the road for eight days. It is not usual to acknowledge them but the usual channels seem to have worked very well in respect of this Bill. I want to thank some real trojans, who have had a difficult time—the staff in the Public Bill Office. They are not usually thanked—and nor are the staff in the Whips' Office, who have the daily grind of trying to make sense of our demands for groupings. I am happy to place those thanks on record.

Lord McNally: My Lords, before the noble Lord sits down, although I would have been pleased to associate myself with all his remarks, I will save my plaudits until and if the Bill do now pass. I suspect that we have a little more time yet before we find whether it do pass.

Lord Dixon-Smith: My Lords, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	On Question, Bill passed, and returned to the Commons with amendments.

Financial Statement and Budget Report

Lord McIntosh of Haringey: rose to move, That this House takes note of the Government's assessment as set out in the Pre-Budget Report 2001 for the purposes of Section 5 of the European Communities (Amendment) Act 1993.

Lord McIntosh of Haringey: My Lords, each year the Government are required to send information to the European Commission setting out our main economic policy measures. The procedure is described in Articles 99 and 104 of the EC Treaty, which relate to the broad economic policy guidelines, convergence and stability programmes and the excessive deficits procedure.
	The Government's strategy for economic policy is set out in the Pre-Budget Report 2001. That report will form the basis of the information that we send to the European Commission setting out our main economic policy measures. Section 5 of the European Communities (Amendment) Act 1993, usually known as the Maastricht Act, requires Parliament to approve the government report sent to the Commission for that purpose.
	The function of the reports is to help ensure that member states' economic policies are consistent with the goals of the treaty. Those goals are non-inflationary economic growth respecting the environment; a high level of employment and social protection; and raising the standard of living and quality of life. They are consistent with the Government's own approach to economic policy.
	The key elements of the Government's economic strategy, as set out in the PBR, are to maintain macroeconomic stability to provide a platform for long-term sustainable growth and employment; meet the productivity challenge through promoting competition, enterprise and innovation, skills, investment and public sector productivity; increase employment opportunity for all, to ensure fairness for families and communities; deliver high-quality public services; and ensure a better quality of life for everyone—now and for generations to come—by protecting the environment.
	The Pre-Budget Report describes the Government's strategy to rise to the global economic challenge facing our country and to set out how—on a foundation of stability and growth—we can and will build a stronger, fairer Britain even in an uncertain world. For the first time in three decades, each region of the world has slowed at the same time—and more sharply than before. In addition, no one can yet judge the full and final impact of the traumatic and tragic events of September 11th.
	In the period ahead, there are of course real risks for both Britain and the world. Because of the decisive action taken on monetary and fiscal policy, we remain cautiously optimistic about the prospects for the British economy. Interest rates have been cut seven times in nine months. Britain's interest rates are now the lowest for nearly 40 years. With public spending and public investment rising this year, our fiscal policy is complementing and reinforcing monetary policy and thus stability and growth.
	The Government's first economic priority on coming to office in 1997 was to deliver stability for the long term, recognising that economic stability is a precondition for achieving our objective of high and stable levels of growth and employment. We introduced the new macroeconomic policy framework, which is promoting economic stability by delivering low inflation and sound public finances. We are already seeing the rewards of the new structure.
	Throughout 2001, the British economy has continued to grow. Over the past two years, Britain has had the lowest annual inflation since 1963. Our average inflation has been lower than that of any other comparable country in Europe. Employment has risen by more than 1.2 million since 1997 and unemployment has been at its lowest levels since the 1970s. The new fiscal framework has brought public finances to a healthy and sustainable position. The Government inherited public finances that were in poor shape, yet since 1997 they have been transformed. Since coming to power, we have repaid #51 billion of the national debt. This year, debt has been brought down to 31 per cent of British national income. Britain's debt is now the lowest share of national income in the G7 and the lowest of all our major European partners.
	We also set tough long-term fiscal rules that demand fiscal discipline by a tighter approach in the best of times and which allow automatic stabilisers to work fully at a time such as this—in both cases, fiscal policy supporting monetary policy. Because of our prudence, debt is lower and debt interest payments are lower. Even in these testing times it has been possible to maintain our three-year spending plans for hospitals, schools and public services and to respond to emergencies that have arisen, all the while still meeting the fiscal rules that we have set over the economic cycle, even on cautious assumptions.
	This platform of stability provides the basis for raising productivity. Meeting the productivity challenge offers the prospect of higher growth and increased employment opportunities, with low inflation and low interest rates, and is a key route to raising living standards in society as a whole.
	The Government are working to deliver employment opportunity for all—the modern definition of full employment—and to build a fairer and more inclusive society by tackling child poverty, helping pensioners, rewarding saving, investing in public services and ensuring a fair tax system.
	The Government are building a stronger economic future for Britain. We are meeting our objectives of high and stable levels of growth and employment, and a fairer society for all. These are the right economic policies for Britain. They are also in line with the objectives of the European Union.
	Approving the Motion will enable the United Kingdom to meet our treaty obligations, to provide information and to participate fully in the important process of multilateral surveillance and economic co-operation, as provided for in Articles 99 and 104 of the treaty. I commend the Motion to the House.
	Moved, That this House takes note of the Government's assessment as set out in the Pre-Budget Report 2001 for the purposes of Section 5 of the European Communities (Amendment) Act 1993.—(Lord McIntosh of Haringey.)

Lord Roberts of Conwy: My Lords, we have heard a glowing account of the economy from the noble Lord. He will be relieved to know that I certainly do not intend to call a Division on the Motion, but there is another view about the state of the economy.
	The Pre-Budget Report has some extra words in its title. It states:
	XBuilding a stronger, fairer Britain in an uncertain world".
	Some might say that that is an almost impossible task, a contradiction in terms, because Britain cannot be isolated economically from that uncertain world which began to surround us before 11th September. Noble Lords will agree that the events of 11th September have exacerbated the situation.
	The precarious state of the major world economies and their failing growth are well known to us, and it is hard to believe that Britain will not be similarly affected. But, as the noble Lord said, the Chancellor is cautiously optimistic. He is forecasting growth at 2¼ per cent this year, 2 to 2½ per cent next year and 2¾ to 3¼ per cent in 2003. He was careful to add that this progress will be Xas global growth recovers".
	However, there is a great deal of uncertainty about the pace of global recovery. In spite of the successive falls in American interest rates—if they are reduced again today it will be the eleventh reduction—there are no signs of recovery in the United States as yet. It may be that the recession will be deeper and more prolonged than cautious optimists believe. Lower interest rates may indeed have lost their traction, as one American put it. Japan's decade of troubles—low growth despite minimal interest rates—should be a lesson to us all.
	These are certainly not the circumstances in which to talk about increasing taxes, which will be inevitable if the Government's revenue declines—as it has done—as a result of disappointing growth and falling company profits. Yet the Pre-Budget Report is quite specific about the Government's increased expenditure plans, amounting to #50 billion more in 2003-04 compared with the current year. There are to be real terms increases of 5.6 per cent each year on education, 5.7 per cent on health and 14 per cent on transport.
	I am not questioning whether such increases are necessary or desirable, but I do ask how they can be afforded. How are these increases in spending to be met? Such growth in spending, if it is to be sustained, must be accompanied by substantial growth in the economy, for which we all wish, but I am far from certain that that will be the case. The Government are overly optimistic. Of course the Government can take a bigger slice of GDP—as Labour governments have done in the past—but that is a very dangerous path to follow because the slice taken tends to get bigger every year. It will, of course, weaken the private sector at a time when it needs all the effort and resources it can muster to recover from this global recession.
	I find it very difficult indeed to judge the effect of the different possible economic scenarios on convergence. I can only sympathise with the Government, who cannot find it easy either. What worries me—this is my final point—is that the Government seem to be blinkered and can take only this cautiously optimistic view when they should remember that other, more difficult, scenarios may lie ahead.

Lord Newby: My Lords, it is always a pleasure to speak in a debate on the economy opened by the noble Lord, Lord McIntosh, because he always sets out the Government's stall with such obvious enthusiasm, even though the statement he has made is a precis of the speech he made a fortnight ago.
	I, too, echo some of the concerns expressed by the noble Lord, Lord Roberts, in respect of the forecast. The forecast of 2 to 2½ per cent growth next year is, by virtually all estimates, on the high side. Over the past month, after talking to people in the real world, whether in the service or manufacturing sectors, I cannot find many who seem to think that over the next 12 months—or the 12 months starting from next April, because that is the year we are talking about—we will see such a rosy picture.
	We have to remember that the Government are pinning their hopes in large measure for the financial year 2002 and subsequent financial years on the increase in public expenditure. If, as I suspect, growth in the private sector is significantly diminished, at least in the Pre-Budget Report the Government are expecting and planning for substantial increases in health, education and transport. Again, I have severe doubts as to whether these plans and projections will prove to be the reality.
	In the previous financial year, the Government underspent on relatively modest projections of growth by about #700 million, which, fortunately for poor mathematicians like myself, for last year at least worked out at about 0.7 per cent of GDP. For the next financial year, 2002-03, education and health expenditure are expected and planned to grow by about 5½ per cent in real terms, and transport expenditure is set to grow by between 14 and 15 per cent in real terms. It is on these figures that the Government's expectation of growth in the economy overall is, in part, based. Having failed to meet their expenditure targets by underspending in the previous financial year, the Government will find it extremely difficult to meet their expenditure targets in the coming years, given that those targets are much more optimistic.
	Unlike the noble Lord, Lord Roberts, I welcome the fact that there are very significant increases in expenditure and believe that they can be paid for. I am completely unconvinced that the Government have the ability to spend the money. When one looks at the current chaotic situation in Railtrack where there is now an impossibility of making a decision, far less in committing the hundreds of millions of pounds that are needed and expected for the forthcoming financial years, I have very severe doubts whether that target will be met.
	As regards health and education, the key questions are whether there will be enough doctors and nurses prepared to work in terms of salary and other working conditions relating to both professions. Evidence to date suggests that the Government will have their work cut out to meet their own targets.
	Therefore, I have very significant questions about whether the projections for 2002 and subsequent years will be met. But as our purpose this evening is simply to note them, we do so from these Benches.

Lord Saatchi: My Lords, I begin by thanking the Minister for accommodating this debate this evening. I am aware that he has another engagement so I shall try to keep him no longer than necessary to provide your Lordships with what my noble friend Lord Roberts legitimately called Xanother view". I am sure that the Minister will not mind me reminding him that this amendment to the Maastricht treaty was the inspiration of his noble friend Lord Robertson, who was then Shadow Foreign Secretary.
	In accepting this Motion on behalf of the Opposition, I make it clear to the House that we are not approving the contents of the assessment. I shall be grateful to the Minister if he would confirm, perhaps in his remarks at the end, that the wording used in the Motion does not imply approval of the content, it merely implies approval of the selection of documents which will be used for the purposes of Section 5.
	A great event took place in Downing Street last week. The Chancellor held a book launch. I was one of the low obliged to press my face to the windowpane for want of an invitation. It was a party to celebrate the first book ever produced by the Treasury, complete with a foreword by the Chancellor of the Exchequer himself.
	One former Monetary Policy Committee member said, I thought rather cruelly, XIt won't fill many stockings this Christmas". But I am not so sure. This is a very useful and important book for all students of British economics and politics.
	It describes the structure of monetary and fiscal rules and practice—what the Minister called Xthe fiscal framework"—which has been developed by this Government since 1997 and which led to the documents which are before your Lordships' House this evening.
	The book says that the pre-1997 Treasury was a failure. That is its stark conclusion. It says that because,
	Xmonetary and fiscal policy for a long time failed to make an adequate contribution to higher and stable levels of growth and employment. Indeed monetary and fiscal policy were sometimes a source of instability".
	The book makes it clear that in the opinion of the radical reformers of the current Treasury team a happy resolution of the age-old problems of the British economy did not occur until the present Government arrived on the scene in 1997. I believe that the Minister said as much in his statement.
	In this book the Chancellor fairly takes credit for his great innovation in monetary policy granting operational independence to the Bank of England. But he then proceeds from that premise to the conclusion that the entire monetary and fiscal framework that he has created is a modern miracle, banishing recession in the way that we banished whooping cough.
	For example, a key point he makes in the book is that although inflation came down to current rates well before 1997, it was only after the introduction of the MPC that inflationary expectations fell into line with the actual inflation rate. In that context the Treasury team is especially proud of the symmetry of the inflation target. I quote them:
	XIf the target was two per cent or less"
	they say,
	Xpolicy makers could have an incentive to drive inflation as low as possible . . . even if this had detrimental consequences for output and employment".
	I hope that these extracts give your Lordships a flavour of the mood at the Chancellor's party. It was described by one guest as XPanglossian" and by another as Xself-congratulatory". They really thought that they had found the best in this best of all possible worlds. For a moment those of us looking on these champagne revellers from the outside thought we saw a Harry Potter world where our Prime Minister and Chancellor only have to wish for something for it to come true.
	That dream world is reflected in these documents. I give one example. In them one finds great emphasis laid on the need to improve Britain's public services, which is described as the Xend benefit" of the prudence and skill of the framework which has been devised by this team. That is a painfully familiar refrain to your Lordships. The Government's intention is to achieve that aim by increasing public expenditure, something which my noble friend Lord Roberts thought might be unlikely because of world events. The noble Lord, Lord Newby, thought that even if it could be achieved it would only result in the Government's failure to spend properly the money they raised.
	But here for the record was the Government's dream and we can consider where it stands now. Before the 1997 election the Prime Minister told us that that there were 24 hours to save the NHS. In 1998 he told us,
	XWe are delivering on our promises".
	In 1999 the Chancellor told us that that year would be,
	XNew Labour's year of delivery".
	The Chancellor's advisers claimed that the year 2000 would be,
	XWhen things really started to happen".
	What is the reality? In the NHS,
	XThings are in such a mess, much worse than I would have imagined possible".
	So said this week the President of the Royal College of Surgeons, Sir Peter Morris. As regards transport,
	XA complete and utter mess . . . we are in a much worse and potentially more dangerous situation".
	That observation on the railways was from the chairman of the Rail Passengers' Council, Stewart Francis. He described a situation in which delays were up 45 per cent and morale of those who work in the railways had collapsed because their savings and pensions had been Xstolen" by the Government as a result of the liquidation of Railtrack.
	But there is one ultimate contrast between the Government's dream in this book, the documents and the reality. The Minister spoke tonight of sound public finances. I believe that he shared in the self-congratulatory mood about the Government's prudence. In fact, I am sure that the Minister will agree in a moment or two that this Government are presiding over a 100 per cent turnaround in the public finances of the country.
	According to the Pre-Budget Report and the Minister's statement this evening, the Government are proud of the repayment of #51 billion of debt in the past four years. What he did not mention in the statement is that that repayment is going to be followed in the next four years by borrowing of #55 billion. It is not very prudent, is it, to repay #51 billion one day and borrow #55 billion the next?
	That is not to down play in any way the work of those who have toiled long and hard to compile these documents. On the contrary, they are to be congratulated on their diligence and professionalism. Our complaint is addressed to Ministers for failing to see the enormous need for much greater openness and clarity of presentation.
	These documents clearly show how the Government have fallen in love with their own publicity. For example, they attempted to reduce public spending levels by #5 billion a year in these documents by treating the working families tax credit as part of the income tax system and not social security expenditure. The system which the working families tax credit replaced, family credit, was classified as DSS expenditure.
	But the reader only discovers that on the last page of the notes to the accounts in the Budget documents—the hiding place of creative accountants through the ages. The change in treatment of this one item alone accounts for a miraculous reduction in the tax burden of one half per cent in both 2001 and 2002. I hope that the Minister will shortly tell us by how much the tax credit Bill, which we shall soon have in your Lordships' House, will increase the amount of wrongly allocated sums in the public accounts.
	I believe that this is the problem. The book launch, and the party attending it, reveal a group of people in government who have made the elementary but very human error of believing their own publicity. These documents, the book and the party, all reveal a Government determinedly out of touch with rail passengers, patients and all those who look to their government for the provision of first-class public services. Did not the editor of the Financial Times sum up the public mood at the moment when he wrote:
	XThe enthusiasm of 1997 has congealed into sullen acquiescence. The vast reservoir of trust has been all but drained"?

Lord McIntosh of Haringey: My Lords, perhaps I may begin by responding to the point made by the noble Lord, Lord Saatchi, about the wording of the Motion before the House. He is quite right in saying that on this occasion the Motion is:
	XThat this House takes note of the Government's assessment".
	There have been occasions in the past couple of years when the Motion has said,
	Xtakes note with approval of the Government's assessment".
	I have never understood why it is sometimes Xwith approval" and sometimes without, but I can assure the House that it is not because sometimes we do not approve of our own assessment, but rather because there is some arcane working in the bureaucracy which leads to these changes. They have no significance.
	The noble Lord, Lord Roberts of Conwy, described the title of the Pre-Budget Report as a contradiction in terms:
	XBuilding a stronger, fairer Britain in an uncertain world".
	The noble Lord is right to say that no country can insulate itself from the impact of world economic developments. No one doubts that. I spent some time in my short opening speech referring to the fact that countries in all regions of the world are experiencing a downturn at the same time—which fortunately does not happen very often.
	However, I also spent some time emphasising that we in this country are better placed than we have been on previous occasions to cope with this instability and, as a result, our forecasts—whose assumptions have been audited as always by the National Audit Office—do indicate that we are able to cushion the impact on the United Kingdom this year and have a good prospect of doing so in future years. Despite the weaker external environment the United Kingdom economy is forecast to grow by 2¼ per cent. We are no longer saying that it will grow in the range of 2 to 2½ per cent quoted by the noble Lord, Lord Newby—largely because, given that we know the figures for the first three-quarters of the year, there was not very much scope for variation in the last quarter of the year. But we are, of course, giving a range for 2002 of 2 to 2½ per cent.
	The noble Lords, Lord Roberts and Lord Newby, are dubious about our ability in fiscal policy in the public finances. Over the past four and a half years our forecasts have never been over-optimistic. Indeed, if they have erred at all—unlike the forecasts of previous Chancellors—they have erred on the cautious side. We are on track to meet the tough fiscal rules that we set ourselves for the cycle, including in the cautious case.
	The current budget remains in surplus every year, even using cautious assumptions, ensuring that the Government meet the golden rule. Public sector net debt is stable at 31 per cent of GDP—comfortably meeting the sustainable investment rule. That is my response to what the noble Lord, Lord Saatchi, said about the contrast between debt repayment in the past four years and the forecast of borrowing.
	The noble Lord was present for our brief debate on the Pre-Budget Report a couple of weeks ago. He will have heard his noble friend Lord Marlesford saying, XBorrow, borrow, borrow". Indeed, there are economists who say that this is the time in the economic cycle when it is right to borrow. We may be Keynsians but we do not borrow simply for the sake of borrowing. What we do is to ensure that we protect public spending programmes and that those public spending programmes—in particular in health, education and transport, but also in many other areas—are not only good in themselves, in that they produce good results for the British people, but they are the right thing to do in counter-cyclical policy at this time. Those who argue for an immediate increase in taxes—although I do not hear the Liberal Democrats making that point loudly at the moment—might take some pause at the effect that that would have in terms of macro-economic policy.
	There have been queries in this small debate about public spending and about our long-term goal to deliver world-class public services. The noble Lord, Lord Saatchi, made the point about the inadequacy of our public services in comparison with those in other countries. Let us take the National Health Service. It is true that we have been severely criticised by the president of the Royal College of Surgeons. As I read his criticism, it sounds as if he does not deny that substantial extra resources have been put into the National Health Service, but the drying out of investment and expenditure on public health over a period—I shall not make a political point about it and say over 18 years, but probably over 20 or 30 years—has been such that all of the extra money that has gone into the National Health Service has been soaked up to deal with under-investment in the past. It is rather like the way in which you water a plant. If it has been left dry for many, many years, it is some time before you start to see an acceptable level of nourishment for the plant to prosper. I am afraid that that is the condition not only of our National Health Service but most evidently of our transport services and many other public services.
	I recognise the difficulty. I even, with wry amusement, recognise the contradiction in terms suggested by the noble Lord, Lord Roberts. But we are in a strong position to say that in an uncertain world, as we describe it, we are well placed, because of the policies that we have adopted in the past few years, to survive and to prosper.
	Perhaps I may say a word to the noble Lord, Lord Saatchi, about the Treasury book. I was not invited to the launch party either. I have complained about that. I missed all the champagne, just as he did. I did not even know about it until after it had happened; and I received my copy of the book only this afternoon.
	If the noble Lord is right in saying that the book is complacent:
	XIf it were so, it was a grievous fault, and grievously hath Caesar answered it".
	However, I hope that the message that I have sought to give has not been complacent but has been realistic. I commend the Motion to the House.

On Question, Motion agreed to.
	House adjourned at two minutes before seven o'clock.